U.S. stocks retreat as optimism over spain’s aid request fades
U.S. STOCK FUTURES advanced, following the biggest weekly rally for the Standard & Poor’s 500 Index this year, as investors speculated that the bailout of Spain’s banks will help ease the euro area’s debt crisis.
NEW YORK - U.S. stocks fell, following the biggest weekly rally in the Standard & Poor’s 500 Index this year, as optimism over Spain’s bailout plan gave way to skepticism it will succeed in halting the debt crisis.
Commodity and financial shares had the biggest losses among 10 groups in the S&P 500.
U.S. Steel Corp., the country’s largest producer of the metal by volume, and Morgan Stanley retreated at least 1.6 percent.
Apple Inc. advanced 1 percent before the company debuts new computers and software tools to woo consumers and keep developers making applications amid accelerating rivalry from competitors.
The S&P 500 fell 0.2 percent to 1,322.69 at 11:11 a.m. New York time, after rallying as much as 0.7 percent earlier today.
The benchmark measure for U.S. equities climbed 3.7 percent last week.
The Dow Jones Industrial Average lost 36.33 points, or 0.3 percent, to 12,517.87 today.
Trading in S&P 500 companies was down 13 percent from the 30-day average at this time of day.
“The Spanish deal is another Band-Aid,” said Matt McCormick, who helps oversee $6.2 billion at Bahl & Gaynor Inc. in Cincinnati. He spoke in a telephone interview. “Many investors are viewing this with skepticism. The problem is not going to be fixed by this amount. It’s not a solution, and people know the difference. Expect more volatility not less.”
Spain requested as much as 100 billion euros ($125 billion) of European bailout funds to shore up its banking system.
The crisis in Spain, coinciding with the prospect of Greece leaving the euro after elections on June 17, roiled markets around the world, sending the euro to an almost two-year low on June 1 and pushing Spanish borrowing costs to near euro-era records.
European officials have failed to control the debt crisis that started in Greece at the end of 2009 and has now required a bailout of the euro area’s fourth-largest economy.
Concern about a deepening of the region’s turmoil almost drove the S&P 500 into a bear market last year as the index tumbled more than 19 percent between April 29 and Oct. 3. Since then, the index surged as much as 29 percent to a four-year high in April, then lost 6.6 percent through last week.
Financial shares in the S&P 500 reversed a rally of as much as 1.1 percent. Morgan Stanley lost 1.6 percent to $13.49. Bank of America Corp. declined 1.3 percent to $7.46.
Energy and raw material shares in the benchmark gauge retreated on concern that a worsening of Europe’s crisis may reduce global demand for commodities. U.S. Steel lost 4.4 percent to $18.29.
Apple gained 1 percent to $586.35. It will use the Worldwide Developers Conference starting today in San Francisco to debut Mac computers with high-definition screens, as well as features for the software that powers its iPhone and iPad.
Facebook rose 1.7 percent to $27.56. The biggest social networking company on June 8 completed its third straight weekly loss since it went public in May.