U.S. stocks fell, after erasing earlier gains, amid concern that policy makers can’t agree on measures to contain Europe’s debt crisis.
Alcoa Inc. and DuPont Co. dropped more than 1.5 percent, leading declines in the Dow Jones Industrial Average. Bank of America Corp. and JPMorgan Chase & Co. lost at least 1 percent, as financial shares tumbled.
The S&P 500 lost 0.3 percent to 1,172.10 at 10:44 a.m. New York time, after rising as much as 0.8 percent earlier. The Dow slipped 25.20 points, or 0.2 percent, to 11,165.49.
“This is classic trading range action,” Liam Dalton, president of Axiom Capital Management Inc. in New York, which oversees $1.4 billion, said in a telephone interview. “We’re shifting emotions between fear and greed until we get some resolution as to the European situation. This market is struggling to have any continuity.”
A four-day rout last week erased $1 trillion from U.S. equities amid concern Greek insolvency is inevitable and Europe can’t contain the damage. The decline left the S&P 500 trading at 12.4 times earnings in the past 12 months, 4.4 percent below its average valuation at the lowest point during the last nine bear markets, Bloomberg data shows.
Stocks erased gains today as an official said the European Commission is resisting a push to impose bigger writedowns on banks’ holdings of Greek government debt than those agreed at a July 21 summit.
The commission, the European Union’s executive body, opposes ideas that are being floated by some government officials to get banks to accept bigger so-called haircuts and doesn’t want to have talks about any such attempt, the official said on condition of anonymity because the deliberations are private.
Equities trimmed a rally in the final hour of trading yesterday after the Financial Times reported that some euro-area countries are demanding that private creditors take bigger writedowns on their Greek bond holdings.
Stocks rose earlier today as a Commerce Department report showed orders for U.S. capital goods climbed in August by the most in three months, a sign business investment continues to support the recovery. Bookings for goods like computers and communications gear, excluding military hardware and aircraft, climbed 1.1 percent, the most since May. Demand for total durable goods dropped 0.1 percent, less than forecast.
The S&P 500 has been trading between about 1,100 and 1,300 since the beginning of August. The benchmark gauge for U.S. equities climbed as high as 1,363.61 on April 29, before starting a decline of as much as 18 percent through August. The index is down 6.5 percent for the year through yesterday.