U.S. shares fell for a second straight week, driving the Dow Jones Industrial Average to the biggest loss of 2012, as political tension in Greece heightened concern about Europe's debt crisis and JPMorgan Chase & Co. (JPM)'s $2 billion trading loss weighed on shares of banks. Financial and technology companies in the Standard & Poor's 500 Index slipped at least 1.7 percent for the week as JPMorgan tumbled 11 percent and Cisco Systems Inc. (CSCO)'s forecasts missed analysts' estimates. Macy's Inc. (M) lost 7.6 percent and Fossil Inc. sank 39 percent amid disappointing projections. Walt Disney Co. (DIS) rose 6.1 percent to an all-time high after the movie “Marvel's The Avengers" earned a record $200.3 million in its opening weekend and profit beat analysts' estimates. The S&P 500 fell 1.2 percent to 1,353.39, the lowest level in two months. The index dropped 3.6 percent over two weeks, trimming its 2012 gain to 7.6 percent. The Dow slipped 217.67 points, or 1.7 percent, to 12,820.60 for its biggest weekly decline of the year. “Europe is the big overlay," Bernie Williams, a portfolio manager at USAA Investment, which oversees $52 billion in San Antonio, said in a phone interview. “People are relatively fearful, but the U.S. seems to be weathering this fairly well." Global equities declined during the week as an inconclusive election in Greece left political parties struggling to form a government. The impasse reignited concern over Greece's ability to meet terms of its two bailouts and the possibility the country will leave the euro. In France, Francois Hollande, who defeated Nicolas Sarkozy as president, pledged to curtail austerity measures. The Europe turmoil overshadowed U.S. data showing jobless claims fell to a one-month low and consumer confidence rose in May to the highest level in four years. Concern that European officials would fail to contain the region's debt crisis helped trigger the bull market's biggest retreat last year. The S&P 500 plunged 19 percent from April 29 through Oct. 3, 2011, as Moody's Investors Service cut its credit ratings on Portugal and Ireland to junk levels. The index then rallied 29 percent to a four-year high on April 2 amid better-than-expected earnings and economic data. Per-share profits have topped projections at 70 percent of S&P 500 companies that reported results during the current earnings season, according to data compiled by Bloomberg. The S&P 500 fell 0.8 percent in April and is down 3.2 percent in May as speculation grew that Europe's debt crisis could slow the global economy. The index hasn't posted back-to- back monthly declines since September. The Dow retreated in eight out of the past 10 trading sessions. JPMorgan sank 11 percent to $36.96. Chief Executive Officer Jamie Dimon blamed an “egregious" failure in trading of synthetic credit securities for the trading loss. The firm's chief investment office, run by Ina Drew, took flawed positions on synthetic credit securities that remain volatile and may cost an additional $1 billion this quarter or next, Dimon said. Cisco tumbled 14 percent to $16.51. The largest maker of computer-networking equipment forecast fourth-quarter sales and profit that missed analysts' estimates, saying some business clients are reluctant to spend. Chief Executive Officer John Chambers said orders from big companies fell in the third quarter and that it's taking longer to sign large deals with corporate customers. Macy's slid 7.6 percent to $37.98. The second-biggest U.S. department-store chain repeated its 2012 earnings forecast of no more than $3.30 a share. The average analyst estimate is $3.39. Fossil (FOSL) plunged 39 percent, the most in the S&P 500, to $78.55. The watchmaker reported first-quarter revenue of $589.5 million, missing the average analyst estimate of $617.9 million, citing a softening economy in Europe. The company also lowered its 2012 earnings forecast to no more than $5.33 a share. The average analyst estimate was $5.56. Disney climbed 6.1 percent to $45.56. The world's largest entertainment company is working on a sequel to “The Avengers" and racing to get more merchandise in stores and plotting to get the characters in its parks, Chairman and Chief Executive Officer Robert Iger said. Dean Foods Co. (DF) surged 18 percent, the most in the S&P 500, to $14.55. The biggest U.S. dairy processor boosted its full- year earnings forecast, saying it expects at least $1.10 a share. Analysts, on average, estimated 95 cents, according to a Bloomberg survey.
