NEW YORK (AP) — U.S. stocks fell mid-morning Wednesday as frustrations mounted over whether Greece would hammer out a cost-cutting deal needed to prevent the country from defaulting on its debt.
After climbing in early trading, the Dow was down 42 points to 12,837 at 11:30 a.m. Eastern. The broader Standard & Poor’s 500 index fell 4 points to 1,343. The Nasdaq composite fell 8 to 2,896.
Caesars Entertainment Corp., a major casino operator, shot up 62 percent to $14.46 on its first day of trading. The initial public offering priced at $9 a share late Tuesday. The company tried to go public in late 2010 but withdrew the offer, blaming market conditions.
Several companies reported strong earnings, sending their stocks higher. High-end clothing company Ralph Lauren jumped 13 percent, and Whole Foods rose 2 percent, another sign that wealthy shoppers are continuing to spend even as the overall economy continues to struggle.
Sprint Nextel Corp. plummeted 7 percent after the phone company reported a fourth-quarter loss. While Sprint added subscribers, it had to pay dearly for them. Sprint started offering customers iPhones, but it had to subsidize the cost so customers could buy them for as little as $99.
Greece is in danger of defaulting on its debt next month if leaders can’t agree on new cost-cutting measures that the country’s lenders are demanding. A host of deadlines have already passed without agreement, but the prevailing view on the markets is that a deal will be secured soon.
The talks were delayed three days to make time for exhaustive negotiations with representatives of the European Union, the European Central Bank and the International Monetary Fund.
It’s not that the debt deal would make everyone happy. The private-sector investors will almost certainly be forced to take a giant write-down on the value of their bonds, which could cripple future demand for those bonds. Greece will likely have to cut more from its bloated expenses, which won’t go over well in a country already protesting that cuts have been too severe.
But after months of political gamesmanship and a host of missed deadlines, investors seem to think that any deal would be better than no deal.