U.S. stocks ended on a sharply lower note amid turmoil in Greece over a debt deal. Weak American economic data on the trade gap and consumer confidence also dented the sentiment.
S&P 500 Index retreated 0.69 percent to finish at 1,342.64. The Dow Jones Industrial Average lost 0.69 percent to end at 12,801.23. The Nasdaq Composite Index dropped 0.80 percent to close at 2,903.88.
The stock extended their losses on reports that euro-zone finance ministers have put Greece's financial bailout plan on hold demanding more spending cuts, with them saying Greece's parliament must first approve the new $170 billion reform package before they can give the final nod.
On the economic front, the U.S. trade gap for December widened than forecast for the second consecutive month, coming in at $48.8 billion, up from a revised $47.1 billion in November, while economists expected a $47.8 billion deficit in the month.
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The University of Michigan's consumer sentiment index for February fell to 72.5 from 75 the month before and down from economists expectations of 74.
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In corporate news, Linkedin Corp. (NYSE:LNKD) surged 17.8 percent to $89.99 after the online professional network posted quarterly revenue that doubled from last year. The company also issued an upbeat guidance for 2012. Revenue for the fourth quarter increased to $167.7 million from $81.7 million. It sees first-quarter revenue between $170 million and $175 million, while analysts' expect $170.79 million.
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Alcatel-Lucent (NYSE: ALU) jumped 13.1 percent to $2.19 after the telecommunications equipment manufacturer reported full-year earnings, the company's first since the merger of Alcatel and Lucent in 2006.
Nuance Communications Inc. (NASDAQ:NUAN) dropped 12.9 percent to $26.50 after the provider of voice and language services reported first-quarter results, trailing analysts' estimates. On a non-GAAP basis, the company's earnings per share were 34 cents on revenue of $382.0 million. Analysts' expected earnings of 36 cents on revenue of $391.5 million.
Arch Coal Inc. (NYSE:ACI) slumped 7.5 percent to $14.40 after the coal producer reported earnings of 29 cents a share on an adjusted basis in the fourth quarter, trailing consensus estimate of 32 cents. Revenue of $1.23 billion also missed Wall Street projections of $1.30 billion. The St. Louis, Missouri-based company issued a cautious view for 2012 citing domestic thermal market concerns and is slashing its intended output volumes "to better align with weak generation and coal demand trends."
Cobalt International Energy Inc. (NYSE:CIE) jumped 32.5 percent to end at $31.68 after the oil & gas producer announced significantly better-than-expected flows from a test well offshore of Angola.
The European markets finished sharply lower, with Germany's DAX retreating 1.40 percent to end at 6,694.03. France's CAC40 lost 1.48 percent to close at 3,374.00. Britain's FTSE 100 dropped 0.74 percent to finish at 5,852.03.
In the Asian market, China's SSE Composite Index gained 0.14 percent to close at 2,352.80 and Hong Kong's Hang Seng declined 1.08 percent lower to close at 20,783.86. Japan's Nikkei 225 lost 0.61 percent to end at 8,947.17. India's BSE 30 Sensex finished 0.46 percent lower at 17,748.69.
Commodities closed the day on a negative note with crude oil losing 0.86 percent to end at $98.98 per barrel, while natural gas price edged 0.04 percent higher to close at $2.478 per million metric British thermal units. Gold dropped 1.11 percent to $1,721.8 per ounce, while silver prices fell 1.23 percent to close at $33.5 per ounce.
In the currency market, the euro retreated 0.85 percent against the U.S. dollar to $1.3172. The British pound dropped 0.51 percent against the greenback, and the dollar inched 0.03 percent lower against the Japanese yen to 77.6385.