Basic materials stocks fall as dollar recovers; Financials weigh

U.S. stocks erased morning gains to close lower on Monday as the basic materials and financial sector weighed down the market.

The S&P 500 Index closed down 9.45 points, or 0.89 percent, to trade at 1,056.74. The Nasdaq Composite lost 15.07 points, or 0.70 percent, to trade at 2,126.05.

The Dow Jones Industrial Average finally closed below 10,000 after coming close in the previous two sessions. It lost 103.84 points, or 1.04 percent, to end at 9,908.39.

The dollar was trading down against the euro in the morning session, but managed to rally in the afternoon. It has gained 53 pips against the euro since 12 p.m.

The Dow Jones U.S. Basic Materials Index fell 1.65 percent today. Metals giant Rio Tinto (NYSE:RTP) plunged 3.95 percent. Barrick Gold (NYSE:ABX) and Goldcorp (NYSE:GG) fell 3.52 percent and 3.10 percent, respectively.

Financials continue to struggle on Greece's financial crisis, as the cost of ensuring the sovereign debt of Greece, Portugal, and Spain continued to increase today. The SovX index for the CDS of the sovereign debt of 15 Western European nations also increased today.

The Dow Jones U.S. Financials Index fell 1.91 percent today. Dow Jones Newswires reported that BNP Paribas said that French, German, and Swiss banks are most exposed to Greece.

Among European banks traded in New York, BNP Paribas (OTC:BNPQY) fell 2.31 percent, Deutsche Bank (NYSE:DB) fell 2.75 percent, and Credit Suisse (NYSE:CS) fell 2.82 percent today.

U.S. banks did not fare much better. Citigroup (NYSE:C) shares fell 2.17 percent and Morgan Stanley (NYSE:MS) fell 2.42 percent.

Greek unions are threatening to stage more strikes today. According to Reuters, unions ADEDY and GSEE, which both threatened to strike, together combine for more than half of Greece's 5 million workers.

As obstacles to Greece's austerity plans have mounted, European officials have refused to publicly endorse a bailout option.

At the Group of 7 meeting on Saturday, finance ministers had already rejected an International Monetary Fund bailout as a solution. Under European Union law, other member nations cannot assume Greece's debt. The European Central Bank is similarly constrained.

However, according to several polls, Greece's austerity plan may not face much opposition from its citizens, aside from the possible union strikes.

Greek newspaper To Vima published a poll showing that 64 percent of Greeks support the austerity measures, deeming them necessary.

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