NEW YORK — Unrest in Greece rattled global financial markets Wednesday. Stocks fell the most since June 1 as investors piled into lower-risk assets such as the dollar and U.S. government bonds.
A report on manufacturing in the New York area also came in far below forecasts. That reignited fears that factory production, one of the few bright spots in the U.S. economy, may be weaker than many economists had believed.
Thousands of people gathered on the streets of Athens to protest government cutbacks required by international lenders. Demonstrators hurled rocks at riot police, who responded with tear gas. Greece’s prime minister said he would name a new Cabinet after talks to form a new government with opposition parties failed.
The Dow Jones industrial average fell 178.84 points, or 1.5 percent, to close at 11,897.27. The drop erased all of its 123-point gain from Tuesday and put the average on track for a seventh straight week of losses. All 30 companies in the Dow dropped, led by aluminum maker Alcoa Inc., which lost 2.9 percent. Alcoa’s stock tends to swing with shifting moods about the global economy.
Shares in energy companies also fell. Chevron Corp. and Exxon Mobil Corp. each lost more than 2 percent.
The Standard & Poor’s 500 index fell 22.45, or 1.7 percent, to 1,265.42. The Nasdaq fell 47.26, or 1.8 percent, to 2,631.46.
If Greece defaults on its debt, investors may dump the bonds of other weak European nations such as Portugal, Spain and Ireland, raising borrowing costs for those countries. Also, the dollar could further strengthen against the euro, making U.S. products more expensive abroad. Earlier in the year, a declining dollar played a key role in boosting corporate earnings and sending stocks higher.
Large U.S. companies such as Boeing Co., Caterpillar Inc. and Oracle Corp. sell many of their products abroad, which puts their sales and profits at risk if the dollar strengthens. Companies in the S&P 500 get 20 percent of their profits from Europe.
June is shaping up to be the worst month for the stock market since May 2010. Stocks have risen in three days this month and have fallen in 11. The Dow Jones industrial average and the S&P 500 are now 7 percent below the highs they reached in late April.
