US stocks: Dow Jones closes in the red after former Greek PM rattles nerves

A trader works on the floor of the New York Stock Exchange on May 8, 2012 in New York City.</p>

A trader works on the floor of the New York Stock Exchange on May 8, 2012 in New York City.

US stocks fell sharply in the last 30 minutes of trading today after Greece’s former prime minister Lucas Papademos warned the country’s exit from the euro was still a possibility.

According to MarketWatch, shares had been higher for most of the session and looked set to finish in positive territory for the second day in a row after strong existing home sales data boosted investors’ appetite for risk.

But Papademos rattled investors after he told Dow Jones Newswires that the “risk of Greece leaving the euro is real” and would have a “profound” impact on the euro zone.

His remarks were published ahead of Wednesday’s meeting of European leaders in Brussels where they will discuss ways to prevent the euro zone crisis from spiraling out of control, according to the Associated Press.

The Dow Jones Industrial Average closed down 1.67 points, or 0.01 percent, to 12,502.81, Forbes reported.


The index has finished in the red for 11 of the past 12 sessions.

The Standard & Poor's 500 Index closed up just 0.64 of a point, or 0.05 percent, to 1,316.63. The Nasdaq Composite Index dropped 8.13 points, or 0.29 percent, to close at 2,839.08.

Facebook dragged the tech-heavy Nasdaq lower, falling another 8.9 percent to $31 after Reuters reported that Morgan Stanley, the lead underwriter of the social networking site’s historic initial public offering last Friday, cut revenue forecasts for the company just before it listed.