Wall Street falls on Europe, but late buying trims losses

Tue May 8, 2012 7:44pm EDT
 
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By Angela Moon

NEW YORK (Reuters) - Stocks ended lower on Tuesday after political developments in Greece fanned concerns about Europe's fiscal health, but a late rally helped indexes cut losses to close well above lows.

Stocks spent most of the session sharply lower, with selling following declines in European markets. Fears that Greece will reject an existing international bailout and potentially leave the euro prompted the selling across markets.

The S&P 500 fell through support at 1,350 to reach levels not seen since early March, but buyers emerged to support stocks.

"A lot of people have been looking at 1,350 as the short-term correction level, a level that the buy-the-dip crowd was hoping to get. This doesn't mean the market is not focusing on Europe," said James Dailey, who manages $215 million at TEAM Financial Asset Management LLC in Harrisburg, Pennsylvania.

Sectors sensitive to the economy floundered, with the S&P consumer discretionary sector .GSPD falling 1.3 percent. Investors moved toward safety plays, with utilities .GSPU rising 0.2 percent and telecommunications .GSPL falling just 0.2 percent.

The day's decline in stocks was part of a broad run to safety. Yields on German debt hit a record low while oil fell for a fifth straight day.<MKTS/GLOB>

Leftist leader Alexis Tsipras began efforts to form a Greek government by renouncing the terms of an international bailout and threatening to nationalize banks.

The weekend's elections in France and Greece herald a new era of opposition to government austerity and add to concern about the strength of economic demand in the United States and China.   Continued...

 
Traders work on the floor of the New York Stock Exchange May 7, 2012. REUTERS/Brendan McDermid