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Markets: Wall Street mixed as Europe wrangling continues

Fears of Greek exit push markets down in late trading after earlier strong messages had bolstered sentiment.

By Michael Trudeau | Published May 17, 2012 | comments

News that the European Central Bank had ceased monetary operations to some Greek banks pushed American equity markets to day losses in late trading, despite a rally earlier in the day after France and Germany called on the country to reaffirm its commitment to remain in the EU.

Bank shares were most seriously affected by the news, with JPMorgan Chase ending the day down 2.2 per cent after climbing as much at 2 per cent in the morning session. Credit default swaps on big American banks including JPMorgan Chase also reached their highest points for the year so far as fears of a Greek eurozone exit intensified.

Asset manager Legg Mason shares climbed 7.5 per cent after it announced it would repurchase more than $1bn (£627m) of its debt and that the board had authorised the same amount in share repurchases over the next three financial years.

Markets were also boosted somewhat by data released showing US home construction rebounded in April, although the good news was spiked by another release saying permits, a lead indicator of future construction, had declined seven per cent.

The S&P 500 fell 6 points to close at 1,324, representing an end of play drop of 0.4 per cent. The Dow Jones Industrial Average finished at 12,598, a 0.3 per cent drop of 33 points, while the Nasdaq Composite index ended the day 0.7 per cent down on 2,874.

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