Stocks Close Lower on More Greek Bailout Woes
NEW YORK (TheStreet) -- Stocks closed lower Wednesday as reports that Greece's creditors are delaying the country's bailout eclipsed news that China may provide financial support to the eurozone.
The Dow Jones Industrial Average lost 97.3 points, or 0.8%, to close at 12,781, as it suffered its worst day since Dec. 28. The S&P 500 slipped 7.3 points, or 0.5%, at 1343. The Nasdaq was off 16 points, or 0.6%, at 2916 as Apple (AAPL) shares lost momentum.
Finance ministers in Europe are withholding bailout aid to Greece even after the country's parliament passed a slate of unpopular austerity measures. Greece's creditors canceled a meeting originally scheduled for Wednesday in Brussels, saying that they were not confident Greece's government would follow on its promises after elections in April. The ministers will hold a teleconference instead.
Greece's creditors are now considering giving the country special bridging loans before releasing full aid once a new government is elected. The short term loans would help Greece cover 14.4 billion euro in bond redemptions due March 20 and avoid a default in the short term.Meanwhile, the People's Bank of China has said that China may be able to help Europe through the central bank and its sovereign bailout fund, according to a report from Bloomberg. The governor of the bank, Zhou Xiaochuan, said that Europe's problems are solvable. Germany's DAX closed up 0.61% while London's FTSE was down 0.08%. Japan's Nikkei Average settled up 2.3% and Hong Kong's Hang Seng gained 2.1%. The market was struggling to gain solid footing even after Federal Reserve officials offered some upbeat commentary about the economy in the minutes from their last open market committee meeting, released this afternoon. "Generally speaking the Fed sounds somewhat upbeat on the economy, noting that consumer spending is expanding, credit conditions have been improving and indicators of stress have eased," said Dan Greenhaus, chief global strategist at BTIG. "The probability of a QE3 program is lower today than it was in December." At the same time, most members agreed that overall economic conditions still require an exceptionally low federal funds rate level at least through late 2014. In other economic news, a reading on U.S. industrial production remained unchanged after gaining 0.4% in the previous month. Economists had expected a slight rise. Capacity utilization, however, rose to 78.5, higher than the 78.2 anticipated and an improvement from 78.1 in the prior month. The Empire State manufacturing index for February came in at 19.53, beating the expectation for 15, according to the consensus by Thomson Reuters, rising from 13.5 in January. Home builder confidence rose for a fifth straight month in February, according to the National Association of Housing Builders. The firm's housing market index rose to 29, the highest level in more than four years, beating the anticipated reading of 26. The index registered at 25 in January.
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