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May 9, 2012 Stocks and commodities slid, while the euro extended its longestslump since 2008, as concern that new Greek political leaders willback out of bailout agreements sent the nation s benchmark equityindex to an almost 20-year low. The Standard & Poor s 500 Index slipped 0.4 percent to closeat 1,363.72 at 4 p.m. in New York. The index pared a loss of asmuch as 1.6 percent after holding for most of the day above 1,350,a technical level watched by traders. Greece s ASE index plunged3.6 percent to close at the lowest level since November 1992.Copper and oil lost at least 1 percent as the S&P GSCI Index ofcommodities wiped out most of its 2012 gain. The euro fell aseventh day, losing 0.3 percent to $1.3013. Ten-year Treasuryyields fell to a three-month low. Speculation that Greece s new government will reject terms of itsfinancial rescue grew as New Democracy leader Antonis Samaras saidhe failed to form a coalition following the weekend elections,passing the opportunity to Alexis Tsipras s Syriza party. Tsiprassaid he plans to form a government of left-wing parties that wouldnationalize banks, repeal recent labor reforms and cancel thebailout accords. The situation in Europe could get worse before it gets better, said James McDonald, chief investment strategist at Northern TrustCorp. in Chicago. His firm manages $715 billion. The concern isabout the potential that Greece does not carry through on theiragreements and they default and leave the euro. While investorshave known Greece is going to be challenged to handle their debtload, it s another thing to watch unfold. Rebound From 1,350 The S&P 500 dropped for the fourth time in five days, extendingits retreat from a four-year high last month to 3.9 percent.Consumer-discretionary, financial and commodity companies ledlosses among eight of the 10 main industry groups today. Hewlett-Packard Co. and Bank of America Corp. dropped more than 2percent to lead the Dow Jones Industrial Average (INDU) down 76.44points to 12,932.09, paring losses after sliding as much as 198points. The S&P 500 dipped below 1,350, a so-called supportlevel being watched by traders, for only about 15 minutes thismorning. We found support for the S&P 500 at 1,350 where you wouldhave expected it to be, said Michael Shaoul, chairman ofMarketfield Asset Management in New York, which oversees more than$1.6 billion. Once that held you ve seen a willingness to buythe dip in the U.S. market in names that people have becomecomfortable with. Market Leaders McDonald s Corp. retreated 2.1 percent after April sales trailedanalysts projections. Electronic Arts Inc. (EA), the second-largest U.S. video-game publisher, declined 4.3 percent as itsforecasts fell short of estimates. Fossil Inc., owner of thenamesake watch brand, plunged 38 percent after the company reducedits full-year earnings forecast amid weakness in Europe. The 10-year U.S. Treasury note yield fell for the third straightday, losing three basis points to 1.84 percent after dipping as lowas 1.81 percent, the lowest level since February 3. The governmentsold $32 billion of three-year notes today, the first of threesales this week totaling $72 billion. Investors in Treasuries reduced bets the securities will advanceand raised neutral positions to the highest in a month, accordingto a weekly survey by JPMorgan Chase & Co. The proportion of net longs was cut to zero from six percentagepoints last week as the level of outright longs dropped to equalthe level of outright shorts, which was unchanged at 17 percent. Along position is a bet that an asset will increase in value, whilea short is a wager it will decrease. European Markets The Stoxx Europe 600 Index (SXXP) slid 1.7 percent, erasingyesterday s gain, as six shares fell for each that gained.Automakers, mining and financial-services companies led theretreat. National Bank of Greece tumbled 8.4 percent. Bankia SAslid 4.8 percent in Madrid as El Confidencial said the Spanishgovernment will nationalize the lender. Royal KPN NV rallied 17percent as America Movil SAB (AMX) offered 2.6 billion euros ($3.4billion) to increase its stake. The euro fell 0.4 percent versus the yen. The Dollar Index (DXY),which tracks the U.S. currency against those of six tradingpartners, climbed 0.3 percent, advancing for the seventhconsecutive day in its longest rally since 2010. The so-calledAussie weakened against 12 of its 16 major peers after the nationreported a larger-than-estimated trade deficit. Greece Speculation Greece will probably leave the euro as soon as next month as thegovernment runs out of cash and European institutions fail to lendmore to the nation, according to John Taylor of hedge fund FXConcepts LLC. This summer I think is very likely, Taylor, founder and chiefexecutive officer of FX Concepts in New York, said today in aninterview on Bloomberg Television s Inside Track with ErikSchatzker. The Europeans aren t going to give them the money,the International Monetary Fund s not going to give them an OK.They will be out of money in June. Tsipras told his pro-bailout counterparts they must renouncesupport for the European Union-led rescue if there is to be anychance of forging a coalition. Tsipras said he expected AntonisSamaras of New Democracy and Evangelos Venizelos, the formerfinance minister who leads the Pasok party, to send a letter to theEU revoking pledges to implement austerity measures by the time hemeets with them tomorrow. Samaras said he would not do so, andwould support a minority government if necessary. Greece s Parliament is split down the middle on the bailout dealsnegotiated with the EU and IMF. All Surprised We ve de-stabilized Greece politically and now we re allsurprised they can t take the decisions to do what we want them todo, Carl Weinberg, chief economist at High Frequency Economics,told Bloomberg Television. If Greece falls out of compliance withthe IMF program and goes into a hard default, that will raisequestions about the capital base of the ECB, put a burden on theother governments of Europe, and that will trigger a series ofevents that I think won t have a very happy ending. Oil in New York declined 1 percent to $97.01 a barrel in New York,falling for a fifth day in its longest slump in three months, afterSaudi Arabian Oil Minister Ali al-Naimi said prices are too high.Copper sank 2.5 percent to $3.6775 a pound as 17 of 24 commoditiestracked by the S&P GSCI declined, sending the gauge down 0.6percent and trimming its 2012 advance to 0.6 percent. The MSCI Emerging Markets Index (MXEF) sank 1 percent as benchmarkindexes in Mexico, India and Brazil lost at least 1.4 percent. TheHang Seng China Enterprises Index of Chinese stocks listed in HongKong slid 0.5 percent as residential land sales dropped 92 percentin major Chinese cities. 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