NEW YORK: US stocks ended after the biggest two-day rally in almost a month, as the European Central Bank tightened its rules on Greece’s bailout and oil retreated for the first time in five days.
The S&P 500 dropped 0.4 percent to 2,041.51 at 4 p.m. in New York. The gauge fell in the final 30 minutes of trading, erasing a gain of 0.2 percent, as the ECB said it lifted a waiver on Greek government debt as collateral. The Dow Jones Industrial Average rose 6.62 points, or less than 0.1 percent, to 17,673.02, after climbing 0.7 percent amid a rally in Walt Disney Co.
“This happened sooner than expected and the market’s a little shocked,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “This is the ECB turning the screws, not going to let Greek banks die but the clock is ticking. People thought the ECB would do this at the end of the month and that perhaps before then, a deal could be struck. I guess not.”
The ECB said it will no longer suspend its own collateral rules for Greek government debt, citing doubt over the commitment of the new government to previous reform pledges.
The decision will force Greek lenders, who since 2010 had been able to access funds from the ECB against junk-rated collateral, to apply for funding from their national central bank at less-advantageous rates. The decision comes hours after Greek Finance Minister Yanis Varoufakis met ECB President Mario Draghi in Frankfurt to gain support for his government’s push to renegotiate the terms of its international bailout.
