Reuters: US Dollar Report: GLOBAL MARKETS-Euro, stocks fall on Greek commitment worries

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GLOBAL MARKETS-Euro, stocks fall on Greek commitment worries May 8th 2012, 14:17 Tue May 8, 2012 10:17am EDT * European shares fall as concerns over Greece grow * Euro dips below $1.30 for second straight day * Brent, U.S. oil prices fall for fifth session By Rodrigo Campos NEW YORK, May 8 (Reuters) - Investors sold risk assets like the euro, oil and stocks on Tuesday as Greece's commitment to bailout pledges was put into question, adding to concerns over a possible Franco-German split on policies to tackle the region's debt crisis. The results of elections in Greece and France, in which voters soundly rejected austerity measures, heightened the uncertainty of the path ahead for the euro zone debt crisis. Most European equity markets fell and Wall Street, which showed resilience on Monday, dropped in early trading. Greek voters on Sunday punished the two mainstream parties for supporting the austerity conditions of a bailout. Alexis Tsipras, the leader of the Left Coalition party, said on T uesday Greece's commitment to an EU/IMF rescue deal has become null since the elections. Tsipras, who was given a mandate on Tuesday to form a government after his party came in second, said banks should come under state control and called for an international commission to investigate whether Greece's debt is legal. The euro was down 0.4 percent at $1.3006, off the previous day's low of $1.2955, but briefly traded below $1.30 for a second straight day. "The euro reacted to the Greece headlines, but the move lower has faded a bit because what (Tsipras) said was not so unexpected," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. "The euro remains extremely vulnerable to political risk and if we close below yesterday's low of $1.2955, that would potentially shift the technicals into bear territory." In New York, the Dow Jones industrial average dropped 88.02 points, or 0.68 percent, to 12,920.51. The S&P 500 Index fell 9.77 points, or 0.71 percent, to 1,359.81 and the Nasdaq Composite lost 21.39 points, or 0.72 percent, to 2,936.37. The pan-European FTSEurofirst 300 was down 0.6 percent and the blue-chip Euro STOXX 50 index shed 0.18 percent. Global stocks as measured by MSCI fell 0.6 percent. The Athens General Index was down 4.5 percent Tuesday, for a near 11 percent slide in two days. "Greece is basically a zombie state right now," said Rick Fier, director of trading at Conifer Securities in New York. It will be very difficult for Greece to raise money to pay off their debt, whether or not they stay in the euro zone, Fier said. "If the euro zone is mired in recession for a while, that will put a crimp on (the U.S. economy) as we try to expand." Financial markets are also concerned that France, where president-elect Francois Hollande has also opposed drastic spending cuts, could derail the German-led push for austerity and trigger a new phase of the bloc's debt crisis. Oil prices fell for a fifth straight session on the prospect of weaker growth on both sides of the Atlantic at a time of ample supply from major oil producers. Brent crude fell 1 percent below $112 a barrel, and U.S. crude lost also 1 percent to trade below $97. Link this Share this Digg this Email Reprints

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