May 8 (Bloomberg) -- U.S. stocks fell, sending the Dow Jones Industrial Average lower for a fifth day, as the struggle by Greece’s political leaders to form a government underscored growing concern about the region’s debt crisis.
The Standard & Poor’s 500 Index lost 0.4% to 1,364 at 9:31 a.m. New York time.
“Risk is on the rise in the euro area with political chaos right around the corner in Greece,” said Witold Bahrke, a senior strategist at PFA Pension A/S in Copenhagen. “The outcome of the French parliamentary election remains undecided just like the fate of Spanish banks. It is going to get tough in Europe and will have to get worse before it gets better.”
Equity futures dropped as Greek political leaders meet for a second day to try to form a government after New Democracy’s Antonis Samaras failed to forge an agreement following an election that raised questions about the euro membership. Stocks swung between gains and losses yesterday after Greek voters flocked to anti-bailout parties and Socialist Francois Hollande was elected France’s President.
Alexis Tsipras, whose Syriza party placed second in Greek elections on May 6, said he wouldn’t agree to join forces with New Democracy and Pasok, the two Greek parties that have supported austerity measures in return for international funds. A left coalition government would nationalize banks to spur growth, repeal recent labor reforms and immediately cancel the bailout accords, he said.
The S&P 500 has lost 2% this month as concern about Europe’s debt crisis intensified and data on the U.S. labor market missed forecasts. The index rallied 29 percent from an October low to a four-year high on April 2 amid better-than- expected earnings. About 70 percent of S&P 500 companies that reported results since the start of the earnings season have topped projections, according to data compiled by Bloomberg.
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