Stocks Fall On All Global Worries

On Wednesday, U.S. stocks dropped and the euro was lower on news that a number of Greek banks will need emergency funding, while minutes from the Federal Reserve meeting in April showed that prospects for the recovery of the U.S. economy remained sobering.

The Central Bank in Europe stopped funding the operations of some banks in Greece, as they continue to be undercapitalized. The problems with funding highlighted how weak the state of the banking sector is in Greece. Many Greeks are taking their money out of the banks in fear Greece may soon exit the euro zone.

Worries increased over the stability of the region. In mid-June, Greece will hold elections that will determine if the country remains in the euro zone or opts out. The market has all eyes on Europe, what will happen to Greece and what the potential fallout will be.

The Dow was off by 33.45 points on the day Wednesday with the S&P 500 down 5.86 points and the Nasdaq fell 19.72 points. For part of the day, efforts from Angela Merkel the German Chancellor and Francois Hollande, the new President of France to stop talk of Greece’s possible exit from the zone, helped keep sentiment up. However, stocks in the U.S. retreated on news from the ECB and the minutes from the Fed meeting in April.

Several members of the Federal Reserve Board indicated that it might be necessary to provide additional monetary accommodation for the economy.

On a positive note, industrial production in the U.S. grew at its fastest rate in more than a year during April and new home building was up last month.