US markets

U.S. stocks tumbled as fears of contagion from a possible Greek default picked up, adding more pessimism to a foreboding mix of U.S. economic data. The Dow Jones Industrial Average sank 178.84 points, or 1.48%, to 11897.27, a new three month low that wipes out the week's gains. The Standard & Poor's 500-stock index fell 22.45 points, or 1.74%, to 1265.42 and the Nasdaq Composite shed 47.26 points, or 1.76%, to 2631.46.

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The stock declines were broad-based. All 30 of the Dow components and all 10 of the S&P 500 components finished lower. Only 13 of the S&P 500 companies bucked the trend with modest gains. After the selloff, all three major indexes are down for the week putting the U.S. stock markets on track for their first seven-week slide since 2001. Fears about Greece intensified after euro-zone officials failed to make progress on discussions about aid to that country and protests against austerity measures turned violent in Athens. Greek bonds were pummeled, sending yields to their highest levels since the inception of the euro. The European Central Bank warned that contagion from the euro zone's debt crisis remains the top risk to financial stability in the common-currency bloc, while reiterating its opposition to a Greek debt restructuring. Separately, the Irish budget minister warned of more budget cuts. The declines were led by materials and energy stocks, as crude-oil futures sustained their biggest one-day drop in more than a month. Alcoa shed 2.9% to lead the Dow decliners, while oil giants Chevron and Exxon Mobil fell 2.2% and 2.1%, respectively. Banks were also weak, with Bank of America down 2.8% and J.P. Morgan Chase off 2.2%. Defensive sectors, including utilities, telecommunications and health care, were the three strongest performers.

European markets

European stocks fell sharply amid mounting concerns about Greece and further signs that the U.S. recovery may be stalling. Greece's ASE index skidded 1.9% to 1243.05, while the broader Stoxx Europe 600 index closed down 1.1% at 267.95. Greece was practically shut down Wednesday by a 24-hour general strike to protest new austerity measures, and demonstrations turned violent in Athens. Meanwhile, euro-zone officials remained deeply divided over how to tackle the country's debt. A meeting of euro-zone finance ministers late Tuesday failed to produce an agreement on the shape of a second Greek bailout, leaving investors worried that the most likely outcome would be a disorderly Greek default. Reports swirled that Prime Minister George Papandreou has proposed stepping down from his post to facilitate the formation of a national unity government with Greece's opposition political parties. Worries about Greece spilled over to the broader banking sector after Moody's Investors Service put three French banks Credit Agricole, BNP Paribas and Societe Generale on review for possible downgrades, citing their exposure to Greek government debt and the private sector. Societe Generale lost 2.6% while BNP Paribas and Credit Agricole each fell 2.5%. In Lisbon, Banco Comercial Portugues plunged 6.1% and Banco BPI fell 4.5%. Among Greek banks, National Bank of Greece tumbled 6%. Sentiment was battered further by a slew of gloomy U.S. data, which revealed a mix of rising inflation and weak manufacturing and industrial activity. Among major benchmark European indexes, the U.K.'s FTSE 100 index fell 0.9% to 5748.05, France's CAC-40 index dropped 1.5% to 3806.85 and Germany's DAX fell 1.2% to 7115.08. Shares of banks in the U.K. were under pressure amid expectations that the government later Wednesday would announce plans to ring-fence retail deposits from investment banking operations. Barclays dropped 2.7%, HSBC Holdings shed 1.2% and Royal Bank of Scotland Group fell 1.9%.

Asian markets

Hong Kong stocks fell Wednesday as banks suffered from the double whammy of a Chinese reserve-requirement increase and concerns over a possible Greek default, though Japanese stocks rose, helped by exporters and a limit-up day for Tokyo Electric Power. Hong Kong's Hang Seng Index fell 0.7% to 22343.77, while Japan's Nikkei Stock Average rose 0.3% at 9574.32. The Shanghai Composite fell 0.9% to 2705.43, South Korea's Kospi added 0.5% to 2086.53 and Singapore's Straits Times Index fell 0.1% to 3054.82. Financials losing ground in Hong Kong included Bank of China and HSBC Holdings, each down 1.3%, and Agricultural Bank of China, which gave up 1.4%. The losses extended a late-session fall Tuesday, after the People's Bank of China raised banks' reserve requirement. Also weighing on the sector were anxieties over whether Greece would secure further aid to shore up its finances; Moody's Investors Service placed three French banks on review for a possible downgrade due to exposure to Greek debt. Concerns about Greece also weighed on fashion maker Esprit Holdings, which relies on Europe for much of its revenue. Shares of Esprit closed down 5.1% in Hong Kong. Chinese property developers also took a hit Wednesday after Standard & Poor's cut its outlook on the sector to negative, citing increasingly challenging conditions from tightened credit and restrictive government policy. Evergrande Real Estate Group Ltd. fell 4.7% in Hong Kong, while China Overseas Land & Investment Ltd. lost 1.4%. In Tokyo some exporter shares were boosted by data released Tuesday showing strong growth in China and a smaller than expected drop in U.S. retail sales. Elpida Memory rose 1.5%, Sony climbed 1% and NEC jumped 2.4%.

Base metals

Base metals closed lower on the London Metal Exchange Wednesday, after disappointing industrial and manufacturing data from the U.S. and a stronger dollar trimmed the previous session's gains. U.S. industrial production disappointed slightly Wednesday the 0.1% rise in May coming in just below expectations of a 0.2% increase while a reading on New York-area manufacturing came in well below forecasts. The Empire State index a measure of conditions for New York manufacturers dipped below zero for the first time since November 2010 in June, falling to -7.8 from 11.9 in May. At the close, LME three month copper traded at $9,154 a metric ton, down 0.2% on the day. Crude oil futures settled at a four-month low Wednesday, tumbling toward levels last seen during the early stages of Libya's rebellion, on fears that Greece's debt crisis and a slowing global economy will reduce fuel demand. Light, sweet crude oil for July delivery settled $4.56, or 4.6%, lower at $94.81 a barrel on the New York Mercantile Exchange, after falling as low as $94.01 earlier in the session. Brent crude oil on the ICE futures exchange settled $2.95 lower at $117.21 a barrel. The Brent contract expired at settlement Wednesday. Oil's decline began after a report from the U.S. Energy Information Administration showed a drop in implied demand for oil and fuel products. Average demand over the past four weeks has fallen 3.2% compared with a year earlier. Refinery runs fell to 86.1% of capacity from 87.2% last week, signaling that refiners are cutting back on their production of gasoline and other fuels. Gold inched up, as a rally in the dollar, a competing safe-haven asset, counterbalanced investors' flight to safety on a selloff in equities and commodities. The most actively traded gold contract, for August delivery, ended up $1.80, or 0.1%, at $1,526.20 a troy ounce on the Comex division of the New York Mercantile Exchange. June-delivery gold ended up $1.80, or 0.1%, at $1,525.60 a troy ounce.

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