This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Stocks Finish Lower on Stronger Dollar

NEW YORK (TheStreet) -- Stocks finished deep in the red Friday, as Greece's wobbly financial situation gave the dollar a lift against the euro.

The Dow Jones Industrial Average fell 100 points, or 0.8%, to settle at 12,596. The S&P 500 was lower by 11 points, or 0.8%, at 1338, and the Nasdaq Composite was off by 35 points, or 1%, at 2828.

Although gross domestic product in the eurozone grew by a better-than-expected 0.8% in the first quarter of 2011, concerns that Greece's budget deficit will surpass the limit set under its bailout terms pressured the euro.

According to a European Commission statement quoted by Bloomberg, Greece's deficit is projected to be 9.5% of GDP in 2011, compared with the 7.4% target set by the European Union and the International Monetary Fund. On May 16, eurozone finance ministers will meet to discuss additional options for Greece.

The euro fell 1% against the dollar and the dollar strengthened against a basket of currencies with the dollar index up 0.8%.

Earlier, the FTSE in London declined 0.3%, and the DAX in Frankfurt shed 0.6%. Hong Kong's Hang Seng gained 0.9%, while Japan's Nikkei lost 0.7%.

Financial, conglomerate and basic material stocks bore the brunt of declines. Travelers (TRV), JPMorgan Chase (JPM), Bank of America (BAC) and Caterpillar (CAT) were the Dow's biggest laggards. McDonald's (MCD) and Kraft Foods (KFT) were the only components that settled in positive territory.

The Labor Department's consumer price index rose 0.4% in April, meeting expectations, after rising 0.5% in March. The core rate, which excludes volatile food and energy costs and is considered the closest gauge of inflation, gained 0.2%, coming in higher than the rise of 0.1% that economists had expected. In March, the core rate ticked 0.1% higher.

"The upward pressure in headline inflation will undoubtedly constrain consumption, particularly when coupled with reasonably weak wage growth," said Jim Baird, partner and chief investment strategist for Plante Moran Financial Advisors. "We still anticipate the economy to expand, but a continued slowdown appears possible and the upside for growth still appears likely to disappoint."

Michael Strauss, chief economist and chief investment strategist at Commonfund, was surprised that slightly stronger-than-expected readings on core CPI and PPI didn't have a bigger impact on the market.

"Core inflation is beginning to accelerate. Bernanke may be on the wrong side of this while some of the regional Fed presidents may be closer to the mark," Strauss said. "One of the challenges for the Fed is that they need to take the punch bowl away. Bernanke could be a little slow to do that, so I think the hawks are going to become more vocal."

Consumer sentiment unexpectedly strengthened in May as the University of Michigan's preliminary consumer sentiment reading jumped to 72.4, from 69.8 in April. Economists had expected sentiment to weaken in May, to a reading of 69.5, according to Briefing.com.

Retail

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,104.32 +17.69 0.10%
S&P 500 1,990.61 +3.60 0.18%
NASDAQ 4,482.4130 +8.7160 0.19%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs