Post date: May 14, 2012 4:7:42 PM
The general move out of risky assets, such as equities and commodities, pushed the S&P 500 just below an important support level at 1,340 which, if broken on a sustained basis, could result in a steeper pullback for the index.
Greece's president met little enthusiasm from political leaders on Monday to avert new elections, reinforcing fears the country was on the path to bankruptcy and an exit from the euro zone. The consequences of such an event are unknown. Investors fear it could prompt wider instability in Spain and Italy.
Wall Street follows other global equity markets as it opens lower on concerns over the Greek political impasse and the Chinese economy. JPMorgan Chase Chief Investment Officer Ina Drew departs company after trading loss.
NEW YORK CITY, NEW YORK, UNITED STATES (MAY 14, 2012) (NYSE) - U.S. stocks fell on Monday (May 14), tracking global equity markets lower as a political impasse in Greece heightened concerns about Europe's debt crisis and fears mounted about an economic slowdown in China.
Stocks in economically sensitive sectors such as banks and those linked to natural resources led the decline. Morgan Stanley fell 2.2 percent to $14.62 (USD), while Freeport McMoran Copper & Gold fell 1.6 percent to $34.21.
Concerns about a slowdown in China have been troubling investors for several months. The decision of the world's second-largest economy on Saturday to cut the amount of cash banks must hold as reserves, normally seen as a pro-growth move, suggested the country may be facing more significant headwinds.
The Dow Jones industrial average dropped 124.80 points, or 0.97 percent, to 12,695.80. The Standard & Poor's 500 Index fell 14.21 points, or 1.05 percent, to 1,339.18. The Nasdaq Composite Index lost 25.03 points, or 0.85 percent, to 2,908.79.
JPMorgan Chase & Co sacrificed investment chief Ina Drew on Monday in response to trading losses that could reach $3 billion or more and which have tainted the reputation of the bank's high profile chief executive Jamie Dimon. JPM shares fell 2.7 percent to $35.95 after losing 9 percent on Friday.
The biggest bank in the United States by assets said Drew, its New York-based chief investment officer and one of its highest-paid executives, would retire.
It also said Matt Zames would take Drew's position, while Daniel Pinto, currently co-head of global fixed income with Zames, would become sole head of the group.
The departure of Drew after 30 years at JPMorgan comes after the unit she ran, known as the Chief Investment Office (CIO), mismanaged a portfolio of derivatives tied to the creditworthiness of bonds, according to bank executives.
Yahoo Inc is replacing its CEO for the third time in as many years, and giving three board seats to a hedge fund led by Daniel Loeb, putting him in a strong position to influence strategy at the struggling Internet company. The stock rose 1.8 percent to $15.47.