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U.S. Stocks Drop as Officials Fail on Greece Bailout Agreement

Photographer: Jock Fistick/Bloomberg

Jean-Claude Juncker, Luxembourg's prime minister and president of the Eurogroup, speaks during a news conference following the meeting of European Union finance ministers in Brussels, Belgium. Close

Jean-Claude Juncker, Luxembourg's prime minister and president of the Eurogroup, speaks... Read More

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Photographer: Jock Fistick/Bloomberg

Jean-Claude Juncker, Luxembourg's prime minister and president of the Eurogroup, speaks during a news conference following the meeting of European Union finance ministers in Brussels, Belgium.

U.S. stocks retreated, threatening the 2011 gain for the Standard & Poor’s 500 Index, as European officials failed to agree on a bailout plan for Greece.

Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) dropped, following declines in European lenders. Exxon Mobil Corp. (XOM) and Schlumberger Ltd. (SLB) paced losses in energy companies as oil approached a bear market following a 20 percent drop from its 2011 peak. Research In Motion Ltd. (RIM) retreated 2.1 percent after Sanford C. Bernstein & Co. cut its recommendation for the stock.

The S&P 500 fell 0.2 percent to 1,268.62 at 9:33 a.m. in New York. The benchmark gauge for U.S. equities rose 1.1 percent this year through June 17. The Dow Jones Industrial Average dropped 22.10 points, or 0.2 percent, to 11,982.26 today.

“It’s quite a conundrum,” said Hayes Miller, the Boston- based head of asset allocation in North America at Baring Asset Management Inc., which oversees $51.6 billion. “The European debt crisis overhang is going to be here for a while. We’re going to have positive economic growth, but it’s going to be anemic. That’s not enough to put people back to work.”

Benchmark gauges snapped a six-week decline on June 17, preventing the longest slump for the S&P 500 since March 2001. The S&P 500 has retreated 6.8 percent from this year’s high at the end of April through June 17 amid weaker-than-expected economic data and concern about Europe’s debt crisis.

Stocks fell across the globe today as Europe faltered in its race to save Greece from default as finance chiefs said further aid hinged on embattled Prime Minister George Papandreou delivering budget cuts in the face of domestic opposition.

Confidence Vote

On the eve of a confidence vote that threatens to topple Papandreou, the euro area’s top economic policy makers pushed Greece to pass laws to cut the deficit and sell state assets. They left open whether the country will get the full 12 billion euros ($17.1 billion) promised for July as part of last year’s 110 billion-euro lifeline.

Goldman Sachs Group Inc. cut its forecast for second- quarter U.S. growth to 2 percent from 3 percent, according to a June 17 report by Sven Jari Stehn, an economist for the company in New York.

The S&P 500 is trading close to its average price of the last 200 days of about 1,258.85. A decline below that level could trigger further losses, according to analysts and traders who study charts to make forecasts.

American banks retreated following declines in European peers. Bank of America fell 0.3 percent to $10.65. Wells Fargo dropped 0.1 percent to $27.30.

Energy stocks slumped as oil fell to the lowest in four months in New York. Today’s low marked a 20 percent decline from its 2011 settlement high in April, the sign of a bear market.

Exxon retreated 0.5 percent to $78.66. Schlumberger slid 0.3 percent to $81.53.

RIM declined 2.1 percent to $27.16. The BlackBerry smartphone maker was downgraded to “underperform” from “market perform” at Sanford Bernstein. The 12-month share price estimate is $20.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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