Stocks fall on latest concerns about Greece debt problems; Home sales increase 6.8 percent

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Stocks fall on renewed concerns about Greek debt

NEW YORK — Stocks were mixed Thursday as Greece’s debt crisis took a turn for the worse, raising the prospect that the country will need a bailout program offered by its European neighbors. Homebuilder stocks rose after an upbeat report on home sales.

The Dow Jones industrial average fell about 25 points in afternoon trading after being down as much as 108. Broader indexes also fell. The market gained back some ground after President Barack Obama ended a speech calling for congressional passage of a financial regulation overhaul bill.

Greece’s borrowing costs surged again after Europe’s statistics agency found that the country’s budget deficit last year was even larger than previously thought. The findings pushed Greece closer to tapping loans from 15 European countries and the International Monetary Union. Moody’s Investor Services downgraded Greece’s debt and said more downgrades could be coming.

“It rings the alarm bell at least in the very short-term,” said Steven Goldman, chief market strategist at Weeden & Co. Goldman added that investors have been looking for reasons to sell after two months of steady gains. “It’s more the market really trying to catch its breath — using this as a catalyst,” he said.

Greece’s debt crisis has undermined confidence in Europe’s shared currency, the euro, and raised the troubling possibility that other weak European economies such as Portugal may also need to be bailed out.

Earnings reports also brought concerns about the economy. Shares of eBay Inc. tumbled 7 percent after the online auction house’s profit forecast fell short of what analysts had been expecting.

Profits at mobile phone maker Nokia Corp. missed analysts’ forecasts. The stock lost about 13 percent. Dow component Verizon Communications Inc. reported better-than-expected earnings but the stock lost about 1 percent after the company brought in fewer new customers than predicted.

In a speech in New York, President Barack Obama said the economy is recovering quickly but the progress needs to be felt more deeply among the millions of unemployed Americans. He has blamed Wall Street for helping push the country into recession. Obama gave a speech in support of his efforts to pass legislation that would overhaul financial markets.

The Senate may debate the financial overhaul bill next week. The House has already passed its own version.

Stocks have been climbing steadily over the past 13 months and the gains in the past two months have come with very few breaks. Many analysts have been expected a break in the market’s ascent, which would be in keeping with historical patterns, but most of the recent drops have faded quickly as buyers step in.

Investors sent homebuilder stocks higher after the National Association of Realtors said sales of existing homes rose 6.8 percent last month after falling 0.8 percent in February. Sales of previously occupied homes had been expected to rise 5.2 percent, according to Thomson Reuters.

In late trading, the Dow fell 24.63, or 0.2 percent, to 11,100.29. The Standard & Poor’s 500 index fell 1.13, or 0.1 percent, to 1,204.80, while the Nasdaq composite index rose 5.69, or 0.2 percent, to 2,510.30.

Bond prices fell, lifting yields. The yield on the benchmark 10-year Treasury note rose to 3.77 percent from 3.74 percent late Wednesday.

The dollar rose against other major currencies, while gold fell.

Crude oil rose 2 cents to $83.70 per barrel on the New York Mercantile Exchange.

The Labor Department’s weekly update on jobless claims did little to assuage investors. The number of people applying for unemployment benefits dipped to 456,000 last week, after rising unexpectedly the past couple of weeks. The drop was about inline with expectations.

Shares of eBay fell $1.78, or 7 percent, to $24.51, while Nokia fell $2.05, or 13.6 percent, to $12.91. Verizon slid 35 cents, or 1.2 percent, to $29.21.

Homebuilder Hovnanian Enterprises Inc. rose 26 cents, or 4 percent, to $6.58. KB Home rose 85 cents or 4.8 percent, to $18.60.

About three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 942.1 million shares.

The Russell 2000 index of smaller companies rose 4.72, or 0.7 percent, to 730.91.

In afternoon trading, Britain’s FTSE 100 dropped 1 percent, Germany’s DAX index fell 1 percent, and France’s CAC-40 fell 1.3 percent. Earlier, Japan’s Nikkei stock average fell 1.3 percent