Stocks Slump, Papademos Says Greek Exit Risk is ‘Real’

By Paul Vigna

We said earlier, the market remains driven by Europe, and to prove that point, we give you, well, this afternoon. The Dow was up 50 points at 3 p.m., then these headlines hit Dow Jones Newswires:

*DJ Former Greek PM Papademos: Risk Of Greece Leaving Euro Is Real
*DJ Papademos: Preparations For Greece Euro Exit Are Being Considered

The news drove down the euro, which yoked the Dow with it. Incidentally, the Dow’s high for the day was set before noon, and the index started sliding a little before 3 p.m. So while the Papademos headlines clearly had an effect, certainly on the euro, the stock market here in New York was already running out of steam.

Euro’s lately at 1.2664, and the Dow’s down 47. The S&P 500′s down 5, and the Nasdaq Comp’s down 21. The yield on the U.S. 10-year Treasury’s down to 1.77%.

FactSet Research

UPDATE: After all that, stocks finished essentially flat. The Dow dropped 1.67 points, or 0.01%, to 12502.81. The S&P 500 rose less than a point to 1316.63 and the Nasdaq Comp dropped 8.13 points, or 0.3%, to 2839.08.

Now, Papademos is the former prime minister, keep in mind, and he’s saying something that everybody pretty much expects anyhow. But it just shows you that Europe right now trumps everything.


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