NEW YORK (AP) ? Stocks slumped Wednesday in one of their worst showings this year as Greece, slogging through negotiations with other countries over a bailout, once again cast a long shadow over the financial markets.
The Dow Jones industrial average dropped 97.33 points to close at 12,780.95. It was the worst one-day decline for the Dow this year, and the index narrowly avoided its first triple-digit loss for the year. The average was down as much as 125 points.
The Standard & Poor’s 500 and the Nasdaq composite index climbed tentatively through the morning but gave up their gains by afternoon. The S&P fell 7.27 points to 1,343.23. The Nasdaq fell 16 points to 2,915.83.
The declines were broad, with nine of the 10 industry groups in the S&P recording losses. The only group that didn’t was materials, which was flat. Only five of the 30 stocks in the Dow rose for the day, and just barely.
In a 3?-hour conference call with the finance ministers of the other 16 countries that use the euro, Greece offered assurances that it had found ?325 million in budget cuts in addition to harsh measures that it has already promised.
But in a sign of the distrust that has built during the European debt crisis, particularly among richer countries, a European official said Greece would need tighter oversight of its budget before it receives another bailout.
Greece needs the money before a big bond payment comes due March 20. A default would rattle the world financial system. For weeks, incremental movement in the Greek crisis has whipsawed U.S. stocks.
“Long story short, we long for the days when markets traded on fundamentals,” said David Katz, principal at WeiserMazars Wealth Advisors. He thinks stock picks have been ruled by emotion, rather than clear-eyed examinations of companies’ balance sheets, at least since the credit crunch in 2007 and the ensuing Great Recession.
“Just as quickly as you see the market pop up from one headline, then you see the downturn from another,” Katz said. “It doesn’t really have to be (big news). It’s not even the meat of the story, it’s the headline.”
Greece makes up just 2 percent of the total economic output of the 17 countries that use the euro. But investors are troubled by the fallout from a potential default and similar financial problems festering in other European countries, like Portugal, Italy and Spain.
“There is no shortage of people who would argue that Greece is a non-event,” said Dan McMahon, director of equity trading at Raymond James. “It’s more that it’s a barometer for the rest of the eurozone.”
Stocks have risen steadily all year, so some analysts argued that a slowdown was inevitable. The S&P 500 ended 2011 at 1,258, and many analysts predicted it would end 2012 at 1,350. But it had already reached that level last week.
“When the market does in a few weeks what was expected for the year, it’s natural for the market to sort of pause and pinch itself and say, ‘Is this supposed to go on?'” said Brian Gendreau, market strategist for Cetera Financial Group.
“If it continued at the same pace for the rest of the year, that’s just unrealistic. You’d need an unrelenting drumbeat of good news, and we haven’t gotten that,” Gendreau said.
The price of oil climbed to its highest level in five weeks after Iran said it would cut off some exports of crude to Europe. Iran was responding to the European Union’s plans to embargo Iranian oil this summer, an attempt to pressure Iran to abandon its nuclear program. Benchmark U.S. crude rose $1.06 to end the day at $101.80 per barrel in New York.
The average retail price for a gallon of gas was $3.52. Gas prices are already the highest on record for this time of year, and economists fear that they could crimp the halting economic recovery. This time a year ago, gas was $3.12.
Apple stock went on a wild zigzag. It set an all-time high at midday, $526.29 per share, but fell sharply and closed down $11.79 at $497.67 after eight straight days of gains.
The decline appeared to be caused by rumors that the Nasdaq 100 index would adjust its components to give Apple, the biggest company in the world by market value, less weight. That would force mutual funds that track the Nasdaq 100 to sell Apple stock.
Those rumors may have been overblown. Nasdaq declined to comment on Apple but pointed out that it adjusts the index if a company’s market value represents more than 24 percent of the index. Apple represented about 17 percent at the end of the day Wednesday.
The euro fell slightly against the dollar to just under $1.31. The euro had been mostly rising since mid-January, but topped out around $1.33 late last week.
The yield on the U.S. government’s benchmark 10-year Treasury note fell to 1.93 percent from 1.94 percent. Yields fall and bond prices rise when investors decided to seek a haven for their money rather than take a bet on the stock market.
Among the biggest movers in the U.S. market:
? Comcast, the cable provider, climbed 5 percent after beating Wall Street expectations for profit and revenue. It managed to slow the loss of customers as it added channels and better customer service.
? Kellogg rose 5 percent after announcing it would buy Pringles from Procter & Gamble. Diamond Foods had a deal to buy Pringles but got caught up in an accounting scandal. P&G was flat, and Diamond was up 5 percent.
? Zynga, the maker of popular Facebook games like FarmVille, plummeted 18 percent after reporting it lost money in the fourth quarter. Zynga went public in December.