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Greek Day of Reckoning Shakes Markets  04/17 16:23

   Fear that Greece could default and abandon the euro is rattling global 
financial markets, but for all the turmoil in the markets, major U.S. stock 
indexes closed the day with relatively modest losses.

   NEW YORK (AP) --- Fear that Greece could default and abandon the euro is 
rattling global financial markets.

   News that negotiations between Greece and its international lenders are 
making little progress sent European stock markets down sharply on Friday, and 
the selling spread across the Atlantic. By the close of U.S. trading, stocks 
across industries were lower, with four of five stocks down. Investors shifted 
money into German government bonds, a perceived haven in troubled times.

   In the U.S., disappointing first-quarter financial results from several big 
companies fed the selling. After American Express reported revenue that fell 
short of expectations, investors drove down its stock more than 4 percent.

   "The day of reckoning" for Greece is fast approaching, said Uri Landesman, 
president of investment fund Platinum Partners. "People thought everyone would 
work it out, but if no one caves, there won't be a deal."

   For all the turmoil in the markets, major U.S. stock indexes closed the day 
with relatively modest losses. At one point, the Dow Jones industrial average 
was down 357, heading for its worst day in six months. The Dow regained some of 
those losses toward the close of trading, ending down 279.47 to 17,826.30, a 
drop of 1.5 percent.

   That was only the worst drop since March 25. The Dow has struggled since 
reaching a record high on March 2 and is now back where it started the year.

   The Standard & Poor's 500 index lost 23.81 points, or 1.1 percent, to 
2,081.18. The Nasdaq composite fell 75.98 points, or 1.5 percent, to 4,931.81.

   Greece and its creditors are still struggling to find a deal that can keep 
the country from defaulting on its debt. The argument is over what reforms 
Greece should make in return for loans. Many think Greece will struggle to make 
payments to the International Monetary Fund due next month if it fails to reach 
a deal.

   The concerns have caused investors to demand higher rates for loaning money 
to Greece's government. The yield on the country's benchmark 10-year bond 
jumped to 12.72 percent Friday. That rate has more than doubled from 5.51 
percent in September.

   In corporate news, Honeywell International fell $2.22, or 2 percent, to 
$101.70 after reporting disappointing first-quarter results. The industrial 
conglomerate posted earnings per share that beat estimates, but its revenue 
fell short.

   Advanced Micro Devices plunged 10 percent after reporting a larger loss than 
investors had expected after the market closed on Thursday. The chipmaker's 
stock fell 29 cents to $2.58.

   Investors have been bracing themselves for a disappointing earnings season. 
Companies in the S&P 500 are expected to report earnings per share fell 2.6 
percent from a year earlier, according to S&P Capital IQ, a research firm. That 
would be the first drop since 2009.

   Jim Paulsen, chief investment strategist at Wells Capital Management, said 
stocks are now somewhat expensive compared with earnings and, along with a list 
of other worries, the news from Greece on Friday proved just too much to bear.

   "When you have more nervous investors, news becomes magnified," he said.

   Worrisome news out of China also weighed on investors. After markets closed 
in Asia, Chinese financial regulators issued warnings about that country's 
soaring stock market. Regulators said they will tighten rules on borrowing to 
buy stocks. They also plan to make it easier for investors to bet against the 
market there, The Wall Street Journal reported. Shanghai's stock market has 
more than doubled in the last year.

   "People are thinking maybe the party is over in China," said Doug Cote, 
chief market strategist for Voya Investment Management. "China recognizes that 
it could be creating a bubble, and now it wants to slow down. It's trying to 
rein back risk."

   Germany's DAX index dropped 2.6 percent. France's CAC 40 shed 1.6 percent 
and Britain's FTSE 100 fell 0.9 percent. Investors piled into German government 
debt, which is perceived as being among the safest investments denominated in 
euros. Yields on Germany's 10-year government note, which moves opposite to its 
price, fell to 0.07 percent, a record low, according to Tradeweb.

   The price of oil fell nearly 3 percent Friday on a slowdown in the reduction 
of working drilling rigs, but finished the week sharply higher. A closely 
watched industry count of drilling rigs showed a decline of 26 U.S. rigs for 
the week, compared with a decline of 42 last week.

   Benchmark U.S. crude fell 97 cents to close at $55.74 a barrel in New York. 
U.S. crude finished up 8 percent for the week, however. Brent crude fell 53 
cents to close at $63.45 a barrel in London.

   In other futures trading on the NYMEX:

   --- Wholesale gasoline fell 0.5 cent to close at $1.930 a gallon.

   --- Heating oil fell 2.6 cents to close at $1.882 a gallon.

   --- Natural gas rose 0.5 cent to close at $2.634 per 1,000 cubic feet.

   The dollar fell slightly to 118.86 yen while the euro rose to $1.0794. Bond 
prices fell after the U.S. government reported a slight increase in inflation 
last month. The yield on the 10-year Treasury note fell slightly to 1.87 
percent from 1.88 percent on Thursday.

   Precious and industrial metals futures didn't move much. Gold rose $5.10 to 
$1,203.10 an ounce, silver fell 6 cents to $16.23 an ounce and copper was 
unchanged at $2.77 a pound.


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