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Stocks Succumb to Selling Pressure

NEW YORK ( TheStreet) -- Stocks again finished in negative territory Tuesday as the failure of Greek political leaders to form a new government continued to damage sentiment.

There were reports late in the volatile session that Greek banks were seeing heavier than normal outflows.

The Dow Jones Industrial Average fell 63 points, or 0.5%, to finish at 12,632, its worst close since Jan. 31. The blue-chip index is now down in nine of the past 10 sessions and has lost more than 223 points, or 1.7%, in the past three days.

The S&P 500 shed nearly 8 points, or 0.57%, to settle at 1330, its weakest close since Feb. 2.

The Nasdaq reversed earlier gains to finish in the red as well, dropping 9 points, or 0.30%, to close at 2894, also its lowest level in more than three months.

Breadth within the Dow was negative with 24 of the index's 30 components moving lower. Alcoa (AA), Home Depot (HD) and Hewlett-Packard (HPQ) were the biggest laggards among the blue chips, all losing more than 2% each.

JPMorgan Chase (JPM), United Technologies (UTX) and Wal-Mart (WMT) were among the few Dow stocks gaining ground.

Shares of JPMorgan rose more than 1% Tuesday after the bank successfully concluded its annual shareholder meeting in Tampa, Fla. on Tuesday with little drama or protest.

But Mike Boyle, senior vice president at Advisors Asset Management, is skeptical that the sector is coming back in favor just yet.

"The JPMorgan announcement last week has people a little leery about what's going on with banks," he said. "Are the problems fixed? Is there more regulation coming?"

The bank's credit derivatives trade gone bad continues to attract scrutiny. New York City Comptroller John Liu is now demanding that JPMorgan clawback the compensation of employees directly responsible for the $2 billion loss. Meanwhile the Justice Department has opened a probe into the transaction, according to press reports.

Stocks tumbled Monday on Greece's inability to break a political impasse fueled speculation the country may eventually have to leave the eurozone and destabilize the entire continent.

By Tuesday, party leaders still hadn't formed a new government more than a week after the nation held elections that shifted power in its parliament.

After another round of failed talks among all the political parties in Greece , fragmented by their opposing views on fiscal austerity measures mandated by their European Union/International Monetary Fund bailout deal, leaders of the parties said Tuesday that Greece was headed for a fresh round of general elections in June.

The impact of this development -- not exactly a stunner given the disarray that's been evident in Greece since the elections less than 10 days ago -- was being mitigated by a much stronger-than-expected German gross domestic product report. The eurozone's leading economy posted preliminary, seasonally adjusted, first-quarter GDP growth of 0.5%, compared with a contraction of 0.2% in the fourth quarter. The performance beat even the highest estimate for growth of 0.2% among economists polled by Thomson Reuters.
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Chart of I:DJI
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