Stocks End Lower on Greek Default Jitters

NEW YORK (TheStreet) -- Stocks finished lower Monday as investors remained cautious about Greece's debt situation.

The Dow Jones Industrial Average fell 17.1 points, or 0.1%, to 12,845, but pared back earlier losses of as much as 0.5%. The S&P 500 lost 0.6 point, or 0.04%, to 1,344, and the Nasdaq slid 3.7 points, or 0.1%, to 2,902.

The market's attention turned to the possibility that Greece may be headed for a default. The country is still trying to receive its second bailout package €130 billion ($171 billion) ahead of March 20, the deadline for €14.5 billion ($19.1 billion) in bond repayments.

Greek Prime Minister Lucas Papademos has been unable to convince party leaders backing the country's coalition government to accept harsh austerity measures that come with receiving additional funds. With negotiations making little headway, Germany's Merkel turned up the pressure on Greek political leaders Monday:

"We want Greece to stay in the euro ... but I want to make clear once again that there can be no deal if the troika proposals are not implemented," said Merkel following a Paris meeting with French President Nicolas Sarkozy. "They are on the table, time is of the essence. Something needs to happen quickly."

"The Greek situation is enhancing some profit taking," said Peter Cardillo, chief market economist, Rockwell Global Capital. "However, today's declines are contained."

Market participants seemed confident that the stocks could move higher, especially in the long term. "I'd be very careful calling this a top or bottom. There's some consolidation in reaction to Greece... but not a clear downward trend," added Wayne Lin, portfolio Manager for Legg Mason Global Asset Allocation.

"This market has been walking the high wire and is increasingly unstable, but underlying support is so strong and there are so many underinvested bulls anxious to buy a pullback that it's hard to believe we can see any meaningful downside," added James "Rev Shark" DePorre, founder and CEO of Shark Asset Management.

Meanwhile, some positive economic news out of Europe as well as an upbeat jobs report from the U.S. last week helped keep a cap on losses.

Germany's economics ministry reported that the country's manufacturing orders increased a more than expected 1.7% in December thanks to a wave of demand from outside the eurozone. Orders fell 4.9% in November. All this suggested that the most important European economy could perhaps emerge largely unscathed by the eurozone debt crisis.

London's FTSE closed down 0.15%, and Germany's DAX finished lower by 0.03%. In Asia, Japan's Nikkei Average closed higher by 1.1%, while Hong Kong's Hang Seng index finished down 0.2%.

In corporate news, Micron(MU) appointed Mark Durcan as CEO following the death Friday of Chairman and CEO Steve Appleton in a plane crash. Durcan is the chipmaker's president and chief operating officer. His appointment comes a week after Micron announced he would be stepping down in August. Appleton, a professional stunt plane pilot and former motocross racer, was the only person in the plane when it crashed at the Boise, Idaho, airport. Shares declined 2.8% to $7.72.

Google(GOOG) advanced 2.1% to $609.09 after the Wall Street Journal reported that the Internet search giant was aiming to challenge Amazon's(AMZN) e-commerce supremacy, entering talks with major retailers and shippers about creating a service that would let consumers shop for goods online and receive their orders within a day for a low fee. Amazon shares erased 2.4% to $183.14.

Boeing(BA) has ordered inspections of all 787 Dreamliners already built after discovering a manufacturing error causing delamination on the fuselage. The new flaw will further delay delivery of Boeing's first passenger jet built mainly of carbon-fiber composites. The new jetliner has already faced more than three years of delays. Boeing shares slid 1.2% to $75.46.

Humana(HUM) , the second-largest Medicare provider, reported that fourth-quarter earnings surged 86% as its membership continued to expand with little use of health benefits. The health insurer reported earnings in line with analyst estimates with profit of $1.20 a share, up from 63 cents a share a year earlier. However, revenue came in lower than expected at $9.06 billion, up 9.4% from the prior year. Analysts polled by Thomson Reuters had expected revenue of $9.24 billion. Humana shares dropped 5.4% to $85.25.

Hasbro(HAS) , the world's second-largest toymaker, reported disappointing sales after weak post-Thanksgiving demand in North America. The maker of Monopoly board games reported fourth-quarter sales of $1.33 billion, missing estimates of $1.34 billion. However, the toymaker reported earnings slightly better than analysts' expectations. The company reported profits of $1.06 a share, beating average estimate of $1.05. Hasbro shares climbed 2.2% to $36.66, and Mattel gained 0.7% to $31.75.

No major U.S. economic announcements were expected on Monday.

March oil futures settled 93 cents lower at $96.91 a barrel. In other commodities, April gold futures finished down $15.40 at $1,724.90 an ounce, following the euro lower after Greece failed to secure its second bailout deal, and as profit takers dragged on the metal.

The benchmark 10-year Treasury rose 9/32, diluting the yield to 1.896%, while the U.S. dollar index was up 0.1% to $79.04.

-- Written by Chao Deng. Kaitlyn Kiernan and Andrea Tse in New York.