The stock market Tuesday endured its worst day in three weeks as investors fretted over Greece’s debt crisis and a surge in the U.S. dollar.
Investors seeking safety bought U.S. government bonds.
The Dow Jones Industrial average lost 190.48 points, or 1 percent, to 18,041.54. The Standard & Poor’s 500 index lost 21.86 points, also 1 percent, to 2,104.20, and the Nasdaq composite fell 56.61 points, or 1.1 percent, to 5,032.75.
Only a handful of stocks posted gains. Time Warner Cable rose after agreeing to be acquired by Charter Communications for $55 billion. Time Warner closed up $12.42, or 7 percent, to $183.60. Charter rose $4.45, or 2.5 percent, to $179.78.
Tuesday’s drop can be tied to two phenomena that, when put together, caused the selling to compound.
On one side, investors remain concerned about Greece’s ability to repay its debts. Greece might miss a payment June 5 if it fails to receive bailout funds from creditors, who are demanding that the country make reforms to its economy.
Also, the value of the U.S. dollar surged Tuesday, causing reverberations in several markets. The price of oil, gold and other commodities, which are priced in dollars, dropped. That, in turn, pushed down the stocks of companies that do business in those commodities, such as copper and gold miners, or do most of their business outside the United States. Industrial, oil and gas, and material sector companies were broadly lower.
Meanwhile, another big question for investors is when the Federal Reserve will finally make its first interest rate increase in almost a decade. Many expect that to occur either later this year or early next year.
Both the European Central Bank and the Bank of Japan are in the midst of bond-buying programs to stimulate their economies, as the Fed did recently in the U.S. A byproduct of those programs can be a weakened currency. So when the Fed does raise interest rates, it could cause the U.S. dollar to appreciate even more against the euro and Japanese yen.
The price of oil fell sharply Tuesday as the dollar gained strength against other currencies. Oil is priced in dollars around the world, so a rising dollar makes oil more expensive to holders of foreign currency.
Benchmark U.S. crude fell $1.69 to close at $58.03 a barrel in New York. Brent crude, a benchmark for international oil used by many U.S. refineries, fell $1.80 to close at $63.72 in London.
