US stocks slump on Greek disarray over budget measures

Washington - US stocks drooped Friday as a new Greek deal on budget measures started to fray, ending a four-day run of US investor optimism that Greece had found a way to avoid default.

US stocks rose steadily this week on daily reports that the Greek government was on the verge of agreement on austerity measures being imposed by international lenders and the eurozone. But Friday saw defections by five cabinet members.

George Karatzaferis, leader of Greece’s right-wing LAOS party that is backing the three-party ruling coalition, also said he would withhold his support for the new measures.

The blue-chip Dow Jones Industrial Average shed 89.23 points, or 0.69 per cent, to 12,801.20. The broader Standard & Poor’s 500 Index dropped 9.31 per cent, or 0.69 per cent, to 1,342.64. The technology-heavy Nasdaq lost 23.35 points, or 0.80 per cent, to 2,903.88.

The US currency climbed against the euro to 75.77 euro cents from 75.26 euro cents on Thursday. The dollar dropped against the Japanese currency to 77.61 yen from 77.64 yen.//DPA