U.S. stocks fall as E.Z. worries weigh; Dow Jones down 0.66%

Investing.com - U.S. stocks opened lower on Wednesday, as sustained concerns over a potential Greek exit from the euro zone dampened market sentiment ahead of a highly anticipated European Union summit in Brussels later in the day.

During early U.S. trade, the Dow Jones Industrial Average dropped 0.66%, the S&P 500 index retreated 0.61%, while the Nasdaq Composite index tumbled 0.82%.

Sentiment came under pressure earlier, after former Greek Prime Minister Lucas Papademos said late Tuesday that Greece had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone, a risk he said was unlikely to materialize but was real.

Meanwhile, investors eyed the upcoming EU meeting, amid concerns over a division between France's new President Francois Hollande, who favors measures designed to support growth and pro-austerity Germany.

Computer major Dell was one of the session’s top losers, with shares diving 13.86% after forecasting disappointing second-quarter revenue as U.S. and European corporate tech spending weakens and consumer personal computer sales continue to shrink.

In the Internet sector, Ariba saw shares slip 0.22% after top European software company SAP AG said it plans to buy the U.S. firm in a deal valuing the business and commerce network company at USD4.3 billion, its latest maneuver against Oracle in the Internet-based computing market.

Meanwhile, Facebook rebounded from three consecutive days of losses, jumping 3.65% and shrugging off earlier reports that the social networking giant advised analysts for underwriters to reduce revenue and earnings forecasts.

In the financial sector, Wells Fargo & Co fell 0.32%, after saying that it does not employ the same kind of hedging strategy that triggered a trading loss of at least USD2 billion at rival JPMorgan.

Other U.S. lenders added to losses, with Citigroup tumbling 1.75%, while shares in Bank of America, JP Morgan and Goldman Sachs retreated 1%, 0.88% and 0.68% respectively.

Among earnings, U.S. clothing maker Guess reported a better-than-expected quarterly profit, helped by fewer discounts at its North American retail business and higher sales in Asia, sending shares up 7.82%

PetSmart also posted a better-than-expected quarterly profit and raised its full-year outlook, sending its shares up 8.63%.

Elsewhere, Ford Motor Co jumped 1.18% after receiving on Tuesday its second "investment grade" credit rating, allowing the U.S. automaker to reclaim its Blue Oval insignia and other assets it mortgaged in 2006 to fund its turnaround plan.

Other stocks in focus included Hewlett-Packard, due to post results after the closing bell.

Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 plunged 2.37%, France’s CAC 40 dove 2.13%, Germany's DAX tumbled 1.74%, while Britain's FTSE 100 plummeted 1.79%.

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During the Asian trading session, Hong Kong's Hang Seng Index tumbled 1.33%, while markets in Japan’s Nikkei 225 Index plummeted 1.98%.

Later in the day, the U.S. was to release industry data on existing home sales.