Wall Street down on Spanish aid termsComment on this story
US stocks fell on Monday, led lower by financial and material sectors, as a closer look at the euro zone aid package for Spanish banks disappointed investors and as market volatility rose ahead of the upcoming Greek elections.
Spain will be lent up to 100 billion euros ($125 billion) to help the country's battered banks. The size of the package was larger than expected, partially removing a cloud that has been hanging over financial markets.
Investors have been fearing that a banking crisis in the euro zone's fourth-largest economy could have compounded the currency bloc's troubles with Greece ahead of that country's June 17 elections, which many investors fear could lead to Greece leaving the euro zone.
“A closer look at the deal shows that this is strategic and tactical rather than a comprehensive ECB nuclear bailout option.
Given the gravity of the European problem, not just Spain, people kind of waking up to the fact that this is something but not enough,” said James Dailey, portfolio manager of TEAM Financial Asset Management.
“A lot in the market had happened last week building up to this. Now that we have this out of the way and Greek elections on Sunday, what good could happen until then? We have lost a short-term catalyst.”
After the aid news was announced over the weekend, futures indicated gains of more than 1 percent on Sunday. However, they subsequently lost ground as concerns over the region persisted.
In addition, some weak data from China underscored the hurdles being faced to strong growth.
The Dow Jones industrial average was down 43.59 points, or 0.35 percent, at 12,510.61. The Standard & Poor's 500 Index was down 3.97 points, or 0.30 percent, at 1,321.69.
The Nasdaq Composite Index was down 7.87 points, or 0.28 percent, at 2,850.55.
In part because of uncertainty stemming from the euro zone, US companies are finding it more difficult to grow their revenue now than at just about any time since the financial crisis.
Wall Street is coming off the previous week's advance, which was 3.7 percent on the S&P 500, the index's biggest weekly gain of 2012.
In a sobering sign of slowing overseas economic growth, China's inflation, industrial output and retail sales all flagged in May. It was the second straight month of sluggish growth, which galvanised policymakers last week into taking their boldest action yet to combat a sharpening slowdown.
Apple shares rose 1.1 percent to $586.70. Apple Inc kicks off its annual conference for software developers on Monday, and more than ever, the consumer electronics juggernaut finds itself in a pitched battle with the online search giant, Google Inc - in smartphones, cloud computing and the never-ending competition for the hearts and minds of the best software developers.
Facebook Inc is on the preliminary list to join the Russell 3000 index , according to Russell Investments on Monday. The stock is up 1.7 percent at $27.55.
Goldman Sachs is close to striking a deal over the sale of its hedge fund administration business with State Street Corp, the Financial Times reported. The move would create the largest administration services provider to hedge funds worldwide. The stock fell 0.7 percent to $93.88. - Reuters