U.S. stocks fell from multiyear highs after disappointing housing data and concerns about a new Greek bailout plan put investors in a mood to sell the day after the Dow Jones industrial average crossed the psychologically important mark of 13,000 for the first time since 2008.
The Dow fell 0.2%, or 24.29 points, to 12,941.40 in early trading Wednesday. The Standard & Poor's 500 index dropped 0.04%, or 0.59 points to 1,361.62. The technology-heavy Nasdaq composite was down 0.3%, or 8.02 points, to 2,940.55.
European markets fell overnight after data were released showing that the euro zone's service sector unexpectedly shrank. Worries also grew about the Greek situation despite the agreement reached Tuesday to provide a sweeping $170-billion bailout package. Fitch downgraded Greek debt Wednesday morning, noting in a statement that “default is highly likely in the near term.”
Investors were also spooked by the slowdown in Chinese manufacturing that has now gone on for four consecutive months, according to a report from HSBC Holdings and Markit Economics. The data could signal larger problems for the Chinese economy.
Investors were looking to Wednesday’s housing data for signs of continued rejuvenation in the U.S. economy.
The number of existing home sales in the U.S. grew in January by 4.3%, according to the National Assn. of Realtors. That beat the expectations of analysts, but the figure that had previously been reported for December was revised down, in turn bringing the rate of annual growth down.
The Dow crossed 13,000 on Tuesday, reaching the day's high at 13,005.04 before dropping back to finish up 15.82 points, or 0.12%, at 12,965.69. Enthusiasm over the Greek debt deal was tempered by a nine-month high in the price of crude oil and lower than expected earnings from the world’s largest retailer,Wal-Mart.