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Wall Street reverses massive gains on euro fears

U.S. Stocks

Wall Street reverses massive gains on euro fears

U.S. stocks reversed strong gains to close lower Wednesday as investors fretted over the decline of the euro and a mounting European debt crisis.
The Dow Jones Industrial Average ended the day down 69.30 points (0.69 percent) to 9,974.45 - the first time the blue-chip index closed below the sensitive 10,000 level since Feb. 8.
Sentiment turned negative in the last hour of trade after a day-long surge. The Dow was up 135 points at one stage thanks to a positive OECD report that raised the growth forecast and other upbeat U.S. economic data.
The tech-rich Nasdaq index fell 15.07 points (0.68 percent) at 2,195.88 while the broad-based S&P 500 slipped 6.08 points (0.57 percent) to 1,067.95.
"The market is tracking the euro, the euro is still the problem," said Marc Pado, market strategist at Cantor Fitzgerald & Co. as the single European currency fell close to four-year lows against the U.S. dollar.
"The strength of that U.S. dollar index hurts the outlook for trade for the large cap multinationals," Pado said. "We are still watching the euro as a proxy for the whole situation in Europe."
German Chancellor Angela Merkel said Wednesday her country would push "with all our strength" for a strong euro, saying Germany had been a prime beneficiary of the single European currency.
Analysts said a Financial Times report that China was reviewing its holdings of eurozone debt was also a reason for the U.S. stock market's abrupt reversal. The newspaper did not cite a source for the report.
"The bears battled back in afternoon trading, with some media reports attributing the about-face to China's hesitation to buy more European debt," said Andrea Kramer, analyst at Schaeffer's Investment Research.
"Against this backdrop, the major market indexes extended their recent pattern of eleventh-hour volatility," she said.