Stocks Drop on Greece, Fed Comments

U.S. stocks closed broadly lower on Wednesday, as a mix of unease about rescue funds to Greece and Federal Reserve comments quashing hopes for more easing took some steam out of a four-month rally. The Dow Jones Industrial Average lost 97.33 points, or 0.76%, to 12,780.95. The S&P 500 fell 7.27 points, or 0.54%, to 1,343.23. The Nasdaq Composite lost 16.00 points, or 0.55%, to 2,915.83.

The leaders of the two parties in Greece’s coalition government committed themselves Wednesday in writing to respect the terms of a new financial bailout, one of the last remaining conditions set by the country’s foreign creditors before they will consider releasing the funds needed to avert a potentially disastrous default. But amid escalating tension, confusion remained over whether demands for additional measures to close a savings gap had been meet.

The Federal Reserve isn’t about to launch another bond-buying program to boost the economy — at least not anytime soon. While some Fed officials are open to such a move, according to minutes of the Fed’s Jan. 24-25 policy-setting meeting, others believe the economy — which has come to life lately — would need to weaken before taking such action.

U.S. manufacturing output rose in January and a gauge of factory activity in New York state hit a 1-1/2-year high in February, showing a solid underpinning for the economic recovery. Factory production increased 0.7 percent, the Federal Reserve said, after an upwardly revised 1.5 percent rise in December.

The National Association of Home Builders/Wells Fargo housing market index rose to 29 in February from 25 in January, meaning the gauge has more than doubled since September. Seperately, the average square footage of a new home started in 2011 jumped to a record 2,522 square feet in 2001, survey data from the National Association of Home Builders show.