US stocks dipped on Monday as a delay by debt-ridden Greece in accepting the terms of a bailout gave investors little reason to buy equities after a five-week rally. Athens allowed another deadline to slip by as political leaders failed to respond to bailout terms from the European Union and International Monetary Fund. Greece needs the funds by March to meet big debt repayments or face a messy default.
The S&P has rallied for five straight weeks, helped in part by a run of better-than-expected US economic data that was capped by Friday's solid employment report. The broad-based index is up nearly 7 percent for the year. "You can mark it down to everyone biding their time, waiting on Greece," said Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia." The one biggest risk factor out there remains Europe."
Recent actions by central banks in Europe and the United States to maintain loose monetary policies have helped the current resilience and reduced volatility in equity markets. The Dow Jones industrial average was down 41.85 points, or 0.33 percent, at 12,820.38. The Standard & Poor's 500 Index was down 3.04 points, or 0.23 percent, at 1,341.86. The Nasdaq Composite Index was down 7.48 points, or 0.26 percent, at 2,898.18.
With stocks up so much this year, any adverse developments out of Europe were likely to bring a least a cooling-off period for markets. "It's inevitable the risk profile that Greece represents is definitely going to cool the market tone, there is absolutely no way around that," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
Hasbro Inc rose 2.5 percent to $36.77 after the toymaker reported a fourth-quarter profit just above analysts' lowered expectations. Humana Inc posted a big rise in fourth-quarter profit, but revenues came in below the Wall Street view. Its shares fell 5 percent to $85.70 and the Morgan Stanley healthcare payor index lost nearly 1 percent.
Through Monday morning, of the 290 companies in the S&P 500 reporting results, 60 percent posted profits that topped expectations, tracking below recent quarters at this point of the earnings season. Technical analysts at Instinet in New York said a host of metrics, such as an upturn in the S&P 500's moving averages and a strong move up in January boded well for equity prices in the medium term.
"The persistency of both price appreciation and breadth since the beginning of the year suggests the next pullback will be a precursor to another attack on the 2011 highs in the S&P 500 near 1,370." Fidelity National Financial Inc agreed to buy casual dining chain O'Charley's Inc for $9.85 a share. The title insurer already owned a 9.5 percent stake. O'Charley's surged 42 percent to $9.82. Semiconductor stocks lost ground, dragged lower by a drop in Micron Technology Inc in the first trading session after the death of its chief executive. Micron shares were off 2.4 percent to $7.76, while the PHLX semiconductor index dropped 1.8 percent.
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