Stocks fell Friday after renewed concerns about Greece’s ability to pay its debts left investors questioning a global economic recovery.
Markets around the world were mixed after Greece said it might need to turn to the International Monetary Fund for support if European leaders can’t agree on a bailout plan next week. Worries about Greece’s ability to handle its massive debt load have set off periodic bouts of stock selling in the U.S. and overseas over the past two months.
Investors also were cautious after India’s central bank raised interest rates to combat rising prices. That prompted concern that central banks in other countries would follow suit. Reports in the U.S. this week signaled that inflation is minimal.
The news out of Greece and India chilled an advance in U.S. stocks that grew out of rising optimism about a recovery.
“The economic data so far continues to be friendly, but there are a lot of concerns out there,” said Peter Cardillo, Chief Market Economist at the brokerage Avalon Partners Inc. in New York. “The Greek situation is affecting the dollar.”
The dollar, regaining its appeal as a safe investment, rose against the euro and other currencies Friday. Concerns remain that debt problems could spill over to other weak European countries like Spain and Portugal, Cardillo said.
In early afternoon trading, the Dow Jones industrial average fell 60.24, or 0.6 percent, to 10,718.93. The Standard & Poor’s 500 index lost 7.73, or 0.7 percent, to 1,158.09, while the Nasdaq composite index fell 22.93, or one percent, to 2,368.35.
The Dow has risen for eight straight days, its longest stretch of gains since August. The Dow on Thursday logged its highest close since Oct. 1, 2008. Broader indexes are also at their best levels since 2008 so the selling Friday wasn’t surprising. Many traders like to sell some of their stronger holdings when stocks push to new highs.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.66 percent from 3.68 percent late Thursday. The dollar rose against other major currencies, while gold prices fell.
Crude oil fell $1.83 to $80.37 per barrel on the New York Mercantile Exchange as the dollar rose. The stronger dollar made commodities more expensive to foreign buyers. That hurt demand.
In corporate news, aircraft maker Boeing Co. said it will boost production of its 777 and 747 models in anticipation of greater demand from commercial airlines. The increase was originally planned early 2012. Boeing rose 61 cents, or 0.9 percent, to $71.48. The company is a Dow component, so its gain offset some of the average’s loss.
Palm Inc. reported late Thursday a wider than expected quarterly loss, and warned about its current quarter sales. The company said its having a difficult time getting consumers to pay attention to its phones in a market dominated by iPhones and BlackBerrys. Palm fell $1.52, or 26.9 percent, to $4.13.
Global markets initially rose Friday after Britain’s Lloyds Banking Group PLC said it expects to report a profit this year. The partly nationalized bank said trading has so far been strong and provisions for bad assets are not as large as previously forecast.
Three stocks fell for every one that rose on the New York Stock Exchange, where volume came to 955.5 million shares compared with 442.6 million traded at the same point Thursday. Volume was heavy Friday because of the expiration of four kinds options and futures contracts.
The Russell 2000 index of smaller companies fell 9.95, or 1.5 percent, to 671.66.
Overseas, Britain’s FTSE 100 rose 0.1 percent, Germany’s DAX index fell 0.5 percent, and France’s CAC-40 lost 0.3 percent. Japan’s Nikkei stock average rose 0.8 percent.