MARKET SNAPSHOT: U.S. Stocks Sink On Unclear Greek Outcome
05/08/2012| 11:33am US/Eastern
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks fell sharply Tuesday, with the Dow industrials extending losses into a fifth day, as Greece's struggle to form a government intensified worry about the euro-zone debt crisis.
"More and more investors have resisted allowing this market to correct, but when you're fighting the market, the market always wins. We had a little bit of a letup in worry about Europe, but now have decided that chaos is not a good thing," said Bruce McCain, chief investment strategist at Key Private Bank.
After a 198-point drop, the Dow Jones Industrial Average (DJI) was down 177.41 points, or 1.4%, to 12,831.12, with all but three of its 30 components down, including fast-food chain McDonald's Corp. (>> McDonald's Corporation), after its April sales missed estimates.
The S&P 500 (SPX) retreated 19.47 points, or 1.4%, to 1,350.11, with the consumer-discretionary sector down the most among its 10 sectors.
Falling to 1,250 on the S&P 500 would "take you back to levels where you get good solid support. It's not an indication the sky is falling but that the market is coming to terms with the fact that we thought that we were breaking into a much stronger phase, but the reality is we're still stuck in the lethargic, slow growth we've been in since July of 2009," said McCain.
Shares of Electronic Arts Inc. (>> Electronic Arts Inc.) lost 5.9% after the video-game publisher's outlook came in below expectations. Watch-maker Fossil Inc. (FOSL) shares caved 38% after it cut its 2012 earnings forecast.
The Nasdaq Composite (RIXF) shed 48.21 points, or 1.6%, to 2,909.55.
For every stock on the rise nearly four fell on the New York Stock Exchange, where 277 million shares traded as of 11:30 a.m. Eastern.
In Greece, political leaders met for a second day in an effort to create a government after New Democracy's Antonis Samaras was unable to reach a consensus, with the task now falling to Alexis Tsipras, the head of Syriza, the party that received the second most votes.