US stocks fall slightly; Greece debt deadline looms
By KEN SWEET (AP)
NEW YORK (AP) — U.S. stocks fell slightly Thursday, following a sell-off in the Chinese market and continued worries about the approaching debt payment deadline for cash-starved Greece.
The overall market was quiet, with the Dow moving less than 100 points throughout the session. Energy and industrial stocks were among the biggest decliners. Most investors are in "wait and see" mode regarding Greece and the Federal Reserve, which is weighing when to begin raising interest rates.
The Dow Jones industrial average slipped 36.87 points, or 0.2 percent, to 18,126.12. The Standard & Poor's 500 index edged down 2.69 points, or 0.1 percent, to 2,120.79 and the Nasdaq composite lost 8.62 points, or 0.2 percent, to 5,097.98.
In corporate news, chipmakers Avago Technologies and Broadcom agreed to merge in a $37 billion deal. Avago rose 89 cents, or 1 percent, to $142.38. Broadcom fell 91 cents, or 2 percent, to $56.25. Both stocks had jumped sharply Wednesday — Broadcom by 22 percent and Avago by 8 percent — on rumors those companies were in talks.
In Greece, progress in talks between that country and its creditors is unclear. Greece said it expected to reach a deal to get more bailout loans in time to make a key debt payment on June 5. Its creditors were quick to temper expectations.
Greece said it aims to clinch a deal by Sunday, which would allow it to receive the much needed final installment of its international bailout and avoid a default.
Greece has given investors a headache for years now, and many are skeptical that this round of talks will resolve any of the country's debt issues.
"They're likely to kick the can down the road as they have been," said Scott Wren, a market strategist with Wells Fargo. "At this point, I think we're likely looking at Greece leaving the eurozone."
In European markets, Greek stocks fell 1.7 percent. Germany's DAX lost 0.8 percent, France's CAC-40 lost 0.9 percent and the U.K.'s FTSE 100 index rose 0.1 percent.
Along with Greece's debt problems, investors are looking for insight into when the Fed might start raising interest rates. The central bank is expected to increase rates as early as September, but the bank's policymakers say any increase will depend on how the U.S. economy is doing.
Investors were also unnerved but a sell-off in Asia. China's Shanghai Composite sank 6.5 percent. Stock market commentator Hexun attributed the fall to several factors, including brokerages tightening lending to individual investors, selling by speculators and a Chinese sovereign wealth fund selling shares in two state banks.
Despite an economic slowdown in China, the index has gained 40 percent in the past three months. Chinese leaders have tried to tap the brakes on the stock boom, fearing it could run out of control and disrupt economic reform plans.
In the U.S., government bond prices were flat. The yield on the 10-year Treasury note held at 2.14 percent.
In energy markets, oil ended slightly higher after the government reported bigger-than-expected declines in U.S. oil and gasoline supplies. The price of U.S. oil rose 17 cents to $57.68 a barrel after being down $1 a barrel earlier. Brent crude, used by many U.S. refiners in the production of gasoline, rose 52 cents to $62.58 in London.
In other energy futures trading, wholesale gasoline gained 4.1 cents to $1.985 a gallon. Heating oil rose 1.4 cents to $1.87 a gallon and natural gas fell 14.1 cents to $2.706 per 1,000 cubic feet.
In the metals markets, gold rose $2.30 to $1,188.80 an ounce, silver rose two cents to $16.67 an ounce and high-grade copper was unchanged at $2.77 a pound.