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Wall St suffers third straight drop after late slide

Markets fell on uncertainty from the political stalemate in Greece

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Reuters New York
Last Updated : Jan 21 2013 | 4:10 AM IST

US stocks fell for the eighth day in the past 10 on Tuesday as uncertainty stemming from the political stalemate in Greece gave investors another reason to be cautious and sellers came out in force late in the session.

The S&P 500 fell for the third straight session as attempts to form a government in Greece fell apart, raising the possibility of a rejection of the bailout terms spelled out by the European Union for the fiscally troubled nation.

After holding near the unchanged mark for much of the session, stocks moved lower in the absence of positive news to turn the tide of negative sentiment.

"Those who are looking for a little bit of a bounce off the last eight trading sessions lost their nerve because there is really nothing out there to indicate the broader story has changed," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

The concerns about upheaval in the euro zone and its effect on the global economy weighed on energy and materials stocks, with US crude down for the third straight day. The S&P energy index and the S&P materials index each dropped 1.5%.

Quarterly results helped boost retailers TJX, up 6.9% at $42.45, and Dick's Sporting Goods, up 5.9% at $50.05.

US retail sales rose 0.1% in April, slightly below expectations. However, details in the Commerce Department's report indicating underlying strength in demand and a rebound in manufacturing activity in New York State calmed concerns that the economy was stalling.

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The declines on Tuesday pushed the S&P 500 down more than 6% from its early April high, leaving some investors optimistic that the pullback may be nearing an end as stock prices become more attractive.

"We could go a little lower, but not much lower. It's hard to ignore the fundamentals - and clearly there are some good fundamentals and prices," said Mark Martiak, senior wealth strategist at Premier/First Allied Securities in New York.

Data showing an index of home builders' sentiment at a five-year high in May helped lift the sector's shares. The PHLX housing index advanced 0.6%. But Home Depot shares lost 2.4% to $48.67 and ranked as the biggest drag on the Dow after the home improvement retailer posted quarterly sales that fell short of Wall Street's expectations.

The Dow Jones industrial average dropped 63.35 points, or 0.50%, to 12,632.00 at the close. The Standard & Poor's 500 Index  lost 7.69 points, or 0.57%, to 1,330.66. The Nasdaq Composite Index fell 8.82 points, or 0.30%, to 2,893.76.

JPMorgan Chase & Co rose 1.3% to $36.24, mostly unchanged this week after falling more than 11% last week after disclosing a trading loss of at least $2 billion. Pressure mounted on the bank to reclaim some of the millions of dollars it paid to the executives who oversaw the wrong-way trades.

Avon Products Inc tumbled 9.7% to $18.71 after Coty Inc withdrew its $10.7 billion takeover bid for the company, saying it had missed a deadline to start discussions.

Chesapeake Energy Corp shares dropped as much as 7.8% to $14.31, their lowest since March 2009, after a credit rating downgrade and news that the natural gas producer will increase its borrowing to $4 billion from the planned $3 billion as it faces a liquidity crunch. Chesapeake shares finished the session down 5.6% at $14.65.

Facebook Inc increased the price range of its initial public offering, aiming to raise more than $12 billion and giving the world's largest social network a valuation potentially exceeding $100 billion.

The indications of high demand for Facebook's IPO prompted some buyers to snap up other social media companies' shares, such as online game maker Zynga Inc, up 7.7% at $8.56.

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First Published: May 16 2012 | 9:30 AM IST

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