Dow off 76 as Greek debt crisis erupts again

Updated: 8:41 p.m. ET

Stocks slumped badly at the open today as traders worried about Greece and the European Union, but the losses prompted buying in the afternoon that cut the losses by as much as two-thirds.

The rebound, however, may be only a short-term event as many analysts see the Standard & Poor's 500 Index ($INX) falling to 1,300 in the next few months.

The problem with Greece was the inability of its politicians to form a government. There's talk that the government will run out of cash in June or July without help. But help isn't yet visible. There's talk the country will abandon the euro. Add a dash of worry that U.S. stocks are starting what looks to be their usual spring-and-summer swoon, and you had the recipe for a miserable day for stocks.

And you got it for much of the day. The Dow Jones industrials ($INDU), in the throes of their fifth straight loss, were down as many as 198 points, but the loss shrank to less than 80 points.  Walt Disney (DIS) shares were up 1.6% to $45 after hours as fiscal-second-quarte​r earnings of 58 cents a share beat the consensus estimate of 55 cents. Revenue was up 6.1% to $9.63 billion.

The Dow closed down 76 points to 12,932 -- its first close below 13,000 since April 23. The S&P 500 was off 6 points to 1,364, its lowest close since April 10. The Nasdaq Composite Index ($COMPX) tumbled 11 points to 2,946, its worst finish since March 7.  The Nasdaq-100 Index ($NDX) was off 9 points to 2,630.

Article continues below.

Disney was up 48 cents to $44.30 in regular trading. The entertainment company's results included a write-off of around $200 million for the film "John Carter." The commercial disaster meant that studio entertainment, Disney's movie business, generated an operating loss of $84 million, down from a profit of $77 million a year ago.

But the company expects the business to show a big profit in the fiscal third quarter because of what appears to be the blockbuster success of the movie "The Avengers." The film grossed $207 million in its opening U.S. weekend and has grossed $702 million globally already.

Disney's results were helped by its television businesses, particularly its ESPN cable business, and its theme parks and resorts. Domestic theme parks did well, as did the Tokyo Disney Resort and Hong Kong Disney Resorts. But revenue slipped at Disneyland Paris, while costs rose.

The Tokyo theme park's 2011 results were terrible after the March earthquake and tsunami, which forced the company to shut the resort down.

In all, Disney earned 58 cents a share in the quarter after an acquisition and restructuring and impairment charges, up 18% from a year ago. Revenue rose to $9.63 billion from $9.08 billion a year ago. The company doesn't offer earnings and revenue guidance, but CEO Bob Iger said the company was "incredibly optimistic" about its prospects. 

A difficult day ends not so badly
The day saw some ugly selling. Fossil (FOSL), an upscale merchant of fashion accessories, closed down $47.25 to $78.52 after warning that sales in Europe are weakening.

McDonald's (MCD) fell $1.96 to $93.55 after April same-store sales growth came in at 3.3%. That was lower than a company projection of 4%. Analysts had been looking for 4.3%. U.S. sales were up 3.3%, well below the analyst estimate of 5%.

McDonald's closing price was below its 200-day moving average, a major barometer of investor confidence. Also ending below its 200-day moving average was Caterpillar (CAT), down 70 cents to $96.49.

Yahoo (YHOO) shares closed up a penny to $15.36. The company has been roiled by questions about CEO Scott Thompson's educational background. He claimed a degree in computer science when his college didn't offer such a degree. Dissident shareholder Daniel Loeb sued the company in a Delaware court, demanding release of documents related to Thompson's hiring.

Director Patti Hart, who headed the search committee, said today's she will step down at the company's annual meeting.

Apple (AAPL), which dominates the Nasdaq-100, briefly was in the black today but closed down $1.30 to $568.18. Its intraday low of $558.73 was its lowest level since April 24.

Futures trading suggests a flat open for stocks on Wednesday. Earnings are due from Macy's (M), News Corp. (NWSA), Cisco Systems (CSCO) and Sodastream International (SODA).

Crude oil and gold move lower
Crude oil (-CL) briefly fell below $96 a barrel in New York, and gold (-GC) was for a moment trading below $1,600 an ounce -- both for the first time since December.

Crude oil in New York settled down 93 cents to $97.01 a barrel after falling to as low as $95.52. Gold dropped $34.50 to settle at $1,604.50 an ounce; it had reached as low as $1,595.50. Gold was up as much as 14% for the year in February; the gain has been cut to 2.4%.

Silver (-SI) was off 66.3 cents to $29.459 an ounce. Copper (-HG) fell 9.6 cents to $3.6775 a pound.

The dollar was higher as investors looked for safety away from Europe. The euro briefly dropped below $1.30 Interest rates were lower, with the 10-year Treasury yield falling to 1.837% from 1.877% on Monday.

"It's the unknown in Europe affecting the market," Hank Smith, chief investment officer at Haverford Trust, told Bloomberg News. "If Greece does exit the euro, will there be contagion? It could have a negative reverberation throughout the globe."

Energy prices -- New York close
			Tues.			Mon.			Month chg.			YTD chg.
Crude oil (-CL)			$97.01			$97.94			-7.49%			-1.84%
(per barrel)
Heating oil (-HO)			$2.9901			$2.9814			-6.10%			2.60%
(per gallon)
Natural gas (-NG)			$2.3930			$2.3360			4.73%			-19.94%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.9944			$2.9741			-4.17%			12.68%
(per gallon)
Brent crude			$112.73			$113.16			-5.51%			5.19%
(per barrel)
Retail gasoline			$3.7630			$3.7770			-1.39%			14.87%
(per gallon; AAA)

Fossil shares get crushed
Fossil's 37% decline was easily the largest among S&P 500 stocks. The company, which markets watches, handbags and other products, reported first-quarter revenue of $589.5 million, missing the average analyst estimate of $617.9 million, citing a softening economy in Europe.

Fossil’s earnings per share of 93 cents beat analysts' expectations by a penny.

The company also lowered its 2012 earnings forecast to no more than $5.33 a share. The average analyst estimate had been $5.56 a share.

Fossil's woes affected Coach (COH), which was down $1.26 to $70.80. Tiffany (TIF) was down 96 cents to $64.75.

"While luxury companies talk up their growth in Asia," Barron's noted today, "they are clearly still heavily dependent on European sales."

A broad decline and light volume
Eight of 10 sectors in the S&P 500 fell back today as consumer discretionary and telecom  shares had the biggest losses. Utilities and health care were the only sectors with gains.

Only five of the 30 Dow stocks were higher on the day, led by Disney and Johnson & Johnson (JNJ), up 18 cents to $64.98. Hewlett-Packard (HPQ), down 55 cents to $23.32, and Bank of America (BAC), down 17 cents to $7.79, were the laggards. Caterpillar, Home Depot (HD), IBM (IBM) and McDonald's contributed 36 points to the Dow's loss by themselves.

A total of 151 S&P 500 stocks finished in the black, led by Cognizant Technology (CTSH) and Tyson Foods (TSN). The laggards were Fossil and Dun & Bradstreet (DNB).

Meanwhile, Vertex Pharmaceuticals (VRTX) and Green Mountain Coffee Roasters (GMCR) were the top Nasdaq-100 performers. Fossil and Wynn Resorts (WYNN) were the laggards. Only 37 stocks in the index showed gains.

Volume, however, was light. Volume on the floor of the New York Stock Exchange barely topped 900 million shares. Nasdaq volume was 2.17 billion shares.

Green Mountain has a rough after hours
Green Mountain shares, however, fell more than 3% to $25.58 after hours after the company said that Chairman and founder Robert Stiller and lead director William Davis resigned their positions but remain board members.

The reason: Margins call had forced the pair to sell 5.548 million shares of company stock. The sales came even though internal policies said they couldn't pledge shares as collateral in margin accounts after Jan. 1. 

Stiller had pledged as many as 12.5 million shares in a margin account. The stock's recent plunge had triggered margin calls and forced the sale of about 5 million shares. Davis had actually added to shares pledged, in violation of the board's policy.

Stiller will be replaced by Michard Mardy, who has been chairman of the company's Audit and Finance Committee. Hinda Miller will take over as chairman of the Governance and Nominating Committee. She has headed the Corporate Social Responsibility Committee.

Leaders and laggards
Dendreon (DNDN) plunged $2.94 to $8.75. The maker of the prostate-cancer drug Provenge reported a first-quarter loss excluding some items of 67 cents a share, wider than the average analyst estimate of a loss of 64 cents.

Video-game maker Electronic Arts (EA) dropped 65 cents to $14.48. It bottomed at $13.83, its lowest intraday price since May 2000. The second-largest U.S. video-game publisher forecast a loss in the first quarter of at least 40 cents a share, wider than the 33-cent loss projected by analysts on average.

Wynn Resorts lost $5.96 to $119.23. The casino company founded by billionaire Steve Wynn reported first-quarter earnings fell 19%, missing analysts' projections on lower winnings in Las Vegas. Separately, Wynn suspended plans to build a casino in Foxboro, Mass., after Monday’s regional elections in which residents voted in anti-casino candidates.

Dun & Bradstreet fell $10.66 to $65.04. The owner of the Hoover's business information service reduced its full-year sales forecast.

Short hits from the markets -- New York close
			Tues.			Mon.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0900%			0.070%			0.00%			800.00%
5-year Treasury note			0.763%			0.782%			-5.92%			-8.07%
10-year Treasury note			1.837%			1.877%			-4.07%			-1.82%
30-year Treasury bond			3.023%			3.067%			-2.77%			4.64%
Currencies
U.S. Dollar Index			79.849			79.293			1.27%			-0.84%
British pound			1.6171			1.6202			-0.44%			4.08%
(in U.S. $)
U.S. $ in pounds			£0.618			£0.617			0.44%			-3.92%
Euro in dollars			$1.30			$1.31			-1.56%			0.64%
(in U.S. $)
U.S. $ in euros			€ 0.767			€ 0.766			1.59%			-0.63%
U.S. $ in yen			80.00			79.90			0.00%			3.76%
U.S. $ in Chinese			6.33			6.31			0.46%			0.06%
yuan
Canada dollar			$1.002			$1.008			-1.12%			2.13%
(in U.S. $)
U.S. dollar			$0.999			$0.992			1.14%			-2.09%
(in Canadian $)
Commodities
Gold (-GC)			$1,604.50			$1,639.10			-3.59%			2.41%
(per troy ounce)
Copper (-HG)			$3.678			$3.774			-3.97%			7.03%
(per pound)
Silver (-SI)			$29.4590			$30.1220			-5.02%			5.53%
(per troy ounce)
Wheat (-ZW)			$6.1500			$6.1200			-6.04%			-5.78%
(per bushel)
Corn (-ZC)			$6.2300			$6.200			-1.77%			-3.63%
(per bushel)
Cotton			$0.8618			0.8667			-3.60%			-6.00%
(per pound)
Coffee			$1.7495			1.752			-2.56%			-23.82%
(per pound)
Crude oil (-CL)			$97.01			$97.94			-7.49%			-1.84%
(per barrel)