US stocks fall on credit downgrades, Greek talks - Emirates24|7

US stocks fall on credit downgrades, Greek talks

US stocks clawed back early sharp losses on S&P's downgrade of France, Spain, Austria and Italy and new worries over Greece Friday, but still ended the day in the red.

At the close the Dow Jones Industrial Average was down 48.96 points (0.39 percent) at 12,422.06.

The broad-based S&P 500 lost 6.41 percent (0.49 percent) to 1,289.09, while the tech-heavy Nasdaq Composite gave up 14.03 (0.51 percent) to end at 2,710.67.

Earlier losses on each of the indices topped one percent as credit downgrades for a swathe of European countries were imminent and after banks negotiating with Greece to write off some of its debt said talks had broken down.

Meanwhile talks between Greece and banks over writing off at least 100 billion euros ($126 billion) worth of Greek debt appeared to stall, giving rise to new worries that Athens might default on its borrowings.

"All parties involved in this crucial negotiation ought to be aware of this very grave condition and assume their responsibilities to avoid the worst," a source close to the talks told AFP.

Also in the air was heightened tensions between the West and Iran, as the New York Times reported that the US quietly warned Iran that a move to block the Strait of Hormuz would provoke a US response.

JPMorgan Chase shares were off 2.5 percent after reporting a drop in profits in the fourth quarter.

Profits fell from $4.8 bn (Dh17.63bn) in the fourth quarter of 2010 to $3.7 billion last year.

Bank of America shares followed suit, dropping 2.7 percent, while Goldman Sachs lost 2.2 percent.

On the Nasdaq, Apple shares fell 0.37 percent after the company admitted employee abuse in its supplier factories and said a workers rights group would be allowed to monitor them.

Video distributor Netflix was up 2.4 percent, as it launched its streaming services in England and Ireland.

Bond prices rose. The yield on the 10-year Treasury slipped to 1.85 from 1.93 percent on Thursday, while the 30-year dropped to 2.90 percent from 2.98 percent.

Bond prices and yields move in opposite directions.

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