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TheStreet Open House

Stocks Tripped Up by Greek Political Disarray


NEW YORK ( TheStreet) -- Stocks tumbled Monday as Greece's inability to break a political impasse fueled speculation the country may eventually have to leave the eurozone.

Worries about the stability of the single-currency bloc were also being aggravated by Spain's financial health, the outcome of local elections in Germany, and weak regional economic data.

The Dow Jones Industrial Average dropped 125 points, or 1%, to close at 12,695. The blue-chip index ranged from 12,661 to 12,819 during the session.

The S&P 500 gave back 15 points, or 1.1%, to finish at 1338, just 2 points above its session low. The Nasdaq suffered the biggest hit, surrendering 31 points, or 1.1%, to settle at 2902. The tech-heavy index's low for the day was 2899.

Breadth within the Dow was negative with 27 of the index's 30 components moving lower. The biggest laggards within the blue-chip index were American Express, (AXP), Bank of America (BAC), Caterpillar (CAT), General Electric (GE), Intel (INTC), JPMorgan Chase (JPM), Microsoft (MSFT), and United Technologies (UTX).

Cisco (CSCO), a big loser last week after its poor outlook, was catching a bounce, up 1.2%.

In the broader market, the number of losers outpaced winners by a ratio of 5-to-1 on the New York Stock Exchange and 3-to-1 on the Nasdaq.

The VIX, the so-called fear gauge, jumped 10% to 21.87. The VIX measures implied volatility through options pricing for the S&P 500. A reading above 20 is seen as the point where fear is on the rise. The VIX had earlier hit its highest levels since Jan. 16.

Eurozone concerns came back to the forefront Monday as Greece continued to struggle to form a new government. The country's various political parties have clashed over next steps for the European Union/International Monetary Fund bailout deal, which involves harsh austerity measures that much of the Greek population has rejected. The gridlock has increased the possibility that Greece will have to call new general elections.

Greek President Karolos Papoulias tried to call together a meeting Monday to resume talks on forming a new government, but Alexis Tsipras, the leader of the radical leftist Syriza coalition, refused to join. The moderate Democratic Left party said it wasn't going to join pro-bailout parties in a coalition without the Syriza party. Eurozone finance ministers remain adamant that Greece abide by the austerity measures.

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