US stocks fall as Europe frets over Greece

SAMANTHA BOMKAMP AP Business Writer Published:

NEW YORK (AP) -- U.S. stocks fell Wednesday as investors worried over the details of a new bailout plan for Greece.

The Dow Jones industrial average lost 5 points to 12,960 just after 2 p.m. Eastern. The day before, it briefly touched 13,000 for the first time since May 2008. The Dow has been trading at or near four-year highs for three weeks.

"The market has done well in the face of some pretty low expectations," said Todd Salamone of Schaeffer's Investment Research. "Right now we're just seeing a few speed bumps."

Salamone said he believes investors will continue to focus more on negative news overseas despite a slew of better news on the U.S. economy. Last week Congress extended the payroll tax cut and the government reported that claims for unemployment benefits dropped to their lowest level since the financial crisis.

In other trading, the Standard & Poor's 500 fell 2 points to 1,360. Energy and health care were the only sectors gaining ground. Financial stocks lost the most. The Nasdaq composite index lost 7 points to 2,941.

European markets closed lower. In Asia, stocks mostly rose even after a fairly weak Chinese manufacturing survey. The dollar rose to a seven-month high against the Japanese yen.

Investors are worrying that Greece's new $172 billion deal may not be enough to keep the debt-laden from eventually defaulting and possibly exiting the euro.

The Greek debt deal also requires private sector bondholders to forgive $141 billion in Greek debt by taking a loss on the face value of their bonds and accepting longer repayment periods and lower interest rates. Among the concerns are that the bailout package does not include measures to boost economic growth. The Greek economy is entering its fifth year of recession.

Fitch ratings agency downgraded Greece further into junk status Wednesday morning following the bailout deal.

Among U.S. stocks making big moves:

-- Computer maker Dell Inc. fell 6 percent after reporting an 18 percent drop in first-quarter profit late Tuesday, hurt by slow sales to government agencies, tough competition from Apple Inc. and flooding in Thailand that disrupted its supply chain.

-- Toll Brothers Inc. fell 3 percent after the luxury homebuilder posted a first-quarter loss, but reported an increased number of signed contracts and backlog, important measures for coming months.

-- GPS maker Garmin Ltd. jumped 8 percent after its fourth-quarter net income rose 25 percent on higher prices and sales. The company's results and 2012 revenue forecast beat Wall Street's expectations.