Dow drops to lowest close since Jan. 18 on Greek crisis

U.S. stocks declined, with the Dow finishing near a four-month low, as worries about Greece again trampled enthusiasm that came with U.S. data, which Wednesday cast a favorable light on factory output and housing.

“Uncertainty is a headwind for the market. The growing consensus is Greece is going to leave, and the euro-zone will be 16 nations by the end of 2012. The unknown is what does that mean for the rest of us?” said Nick Raich, director of research at Key Private Bank in Cleveland.

“The rest of the world seems to be struggling while the U.S. has been a bright spot, or at the very least, less bad,” Raich added.

Scaling back from what had been an 90-plus point advance, the Dow Jones Industrial Average fell 33.45 points, or 0.3 percent, to 12,598.55, its fourth consecutive down day and its lowest close since Jan. 18.

The S&P 500 Index declined 5.86 points, or 0.4 percent, to 1,324.80, with consumer staples the best performer and financial firms hardest hit of its 10 major sectors.

The Nasdaq Composite declined 19.72 points, or 0.7 percent, to 2,874.04.

For every stock that gained more than two fell on the New York Stock Exchange, where 872 million shares traded. Composite volume neared 4.3 billion.

Stock indexes had fluctuated between gains and losses as Wall Street considered reports that included accounts of investors pulling deposits from Greek banks. Those helped the U.S. dollar continue its record streak of gains as investors sought a safe haven. 

Price of oil keeps falling as crude supplies climb

The price of oil continues to decline on the expectation that world markets will be flush with extra supplies this year.

Benchmark U.S. crude on Wednesday fell by $1.17 to finish at a seven-month low of $92.81 per barrel in New York. Oil is down nearly 13 percent since the beginning of May.

Brent crude, which helps set the price of oil imported into the U.S., fell by 53 cents to finish at $111.71 per barrel in London.

Prices fell as a report showed that U.S. crude supplies had climbed to the highest level in 22 years. Supplies grew last week by 2.1 million barrels, according to the Energy Information Administration. That’s a bigger increase than analysts expected, and more could be on the way. 

Penney’s stock plummets as shoppers reject strategy

Wall Street doesn’t seem to like J.C. Penney’s new everyday low pricing any better than Main Street does.

The department store chain’s stock plunged nearly 20 percent on Wednesday — the biggest decline since the 1987 market crash. The drop comes a day after Penney said it would no longer pay out a dividend and blamed its first-quarter loss on poor reception by shoppers to its strategy of getting rid of hundreds of sales each year in favor of predictable low prices every day.

The pricing plan, which was rolled out on Feb. 1, aims to stop the cycle of heavy discounting and discourage customers from waiting for sales. But the reaction by investors and shoppers shows how difficult it will be for Penney to change the mindset of consumers who have been conditioned to expect blockbuster deals from Penney during the recession.