Wall Street gives tepid response to Greek election
NEW YORK — Wall Street stocks ended Monday mixed as traders rapidly digested the victory of pro-euro parties in Greece’s election and focused on the next hurdle in Europe’s marathon economic crisis.
An earlier rally in Asia and Europe on the back of Greece’s election results Sunday had petered out by the time Wall Street got into gear, with the focus already shifting to Spain and its sky-high cost of borrowing.
The Dow Jones Industrial Average closed 25.35 points, or 0.20 percent, lower at 12,741.82 points.
The S&P 500 rose a modest 1.94 points (0.14 percent) to 1,344.78. Meanwhile the Nasdaq rose 22.53 points (0.78 percent) to 2,895.33.
“Greek elections? That’s yesterday’s news. Today’s crisis is a spike in Spanish bond yields,” said Dick Green of Briefing.com.
Sunday’s elections put Greece’s conservative New Democracy party in the lead, with enough seats to form a ruling coalition committed to austerity measures set out in the nation’s 130-billion-euro ($165 billion) EU-IMF bailout.
On the Dow, Hewlett-Packard fell almost three percent, while Bank of America, Alcoa, JPMorgan Chase and General Electric were all down over one percent.
On the government debt market the rate of return investors demanded to hold 10-year Spanish bonds leapt to 7.061 percent — the highest level since the birth of the euro in 1999 and a level regarded as unsustainable over the long term — from 6.838 percent late on Friday.
US borrowing costs eased. The rate on 10-year treasuries fell 0.01 point to 1.58 percent, while the 30-year fell 0.02 point to 2.68 percent.