Stocks slump amid Greek budget woes

By msnbc.com news services

U.S. stocks slid at Monday?s open as concerns grew about the state of Europe's finances as Greece and Germany sparred over budget measures for Athens.

The Dow Jones industrial average was lately down over 100 points.

Bank stocks led the way lower after a report that Germany was pushing for Greece to give up control over its budget policy to European institutions as part of discussions over a second bailout package.

The issues in Greece added to uncertainty ahead of a Monday summit where European Union leaders will sign off on a permanent rescue fund for the euro zone. The leaders are expected to agree on a balanced budget rule in national legislation.

"Resolution for Greece is now up in the air, and that's causing some concern. We could give up the gains we've seen so far this month if there ends up being no progress," said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates Inc. in Toledo, Ohio.

While sentiment has improved over the euro zone lately, with the S&P 500 up 4.7 percent this month, many investors still view the region with caution as setbacks in solving its sovereign debt issues could hamper international economic growth and erode domestic bank profits.

U.S.-listed shares of Barclays Plc fell 4.6 percent to $13.44, and Deutsche Bank sank 5.6 percent to $41.94. European shares were down 1 percent while an index of European banks lost 3.3 percent.

Standard & Poor's late Friday issued negative ratings on three brokerage firms, including Jefferies Group Inc, citing the impact of a prolonged crisis in Europe.

Issues in Europe have taken a backseat to the focus on corporate earnings in recent weeks. By the end of last week, a majority of companies have topped analyst consensus expectations, though by a lower rate than previous quarters.

Gannett Co reported adjusted fourth-quarter earnings that beat expectations. McKesson Corp is scheduled to report later Monday, with Amazon.com Inc Exxon Mobil Corp and Pfizer Inc on tap for later this week.

Shares of Pep Boys Manny, Moe and Jack soared 25 percent to $15.10 in premarket trading after the company agreed to be bought by Gores Group for $791 million.

Swiss engineering group ABB agreed to buy U.S. electrical components maker Thomas & Betts Corp for $3.9 billion in cash, sending shares of the company up 22 percent to $70.90 in premarket trading.

Bank of America Corp is shaking up the leadership of its investment bank as it looks to find its footing in a difficult market environment. The stock fell 2.2 percent in premarket trading.

U.S. consumer spending was flat in December as households took advantage of the largest rise in income in nine months to boost their savings, setting the tone for a slowdown in demand early in 2012.

U.S. stocks ended little changed on Friday as investors saw dips in the market as an opportunity to buy into what has been a strong first month of 2012.

Reuters contributed to this report.

Source: http://bottomline.msnbc.msn.com/_news/2012/01/30/10270353-stocks-slump-amid-greek-budget-woes

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