Markets dragged down by Greek worries

North American markets closed lower Tuesday, but off of their lows earlier in the day, as investors sold on worries that the debt crisis in the eurozone is deepening.

In Toronto, the S&P/TSX composite index was down155.92points, or1.3 per cent, to 11,704.74 after trading down as much as 251. It has lost 5.1 per cent over the last week.

The Canadian dollar repeated the fall to parity it made three weeks ago, trading down 0.53 at 100.17 cents US as traders avoided risky assets, including commodity-based currencies such as the loonie.

In New York, the Dow Jones industrials were down 76.44 points, or0.6 per cent,to 12,932.09 after earlier trading with as much as a 200-point loss. The Nasdaq composite slid 11.49 points, or 0.4 per cent,to 2,946.27 and the S&P 500fell for the fourth day in five, losing5.86 points, or 0.4 per cent,to 1,363.72.

"As concerns increase over the U.S. growth outlook and the consequences of political change in Europe, risk appetite is decreasing," observed Scotia Capital chief currency strategist Camilla Sutton.

Markets didnt like hearing the head of Greece's Radical Left Coalition, Alexis Tsipras, say Tuesday the countrys commitment to austerity is no longer valid because voters have rejected those deals.

Tsipras, who is trying to form a new coalition government after coming in a surprise second in Sunday's tumultuous election, called upon Greece's two main party leaders to renege on their support for the multibillion-euro international bailout that is keeping Greece afloat.

Greece could run out of money in June

Greek voters punished the two parties that have overseen the country's harsh austerity measures and left no party with enough votes to form a government.

Analysts worry Greece could run out of money as soon as next month without a government to negotiate the next level of its financial bailout. That bailout, from its eurozone partners and the International Monetary Fund depends on fulfilling commitments on deficit reduction.

If Greece can't stay solvent, it risks defaulting on its debt and falling out of the eurozone, with potential knock-on effects throughout the global financial system.

June crude on the New York Mercantile Exchange finished trading down 93 cents at $97.01 US, its lowest level since early February.

July copper was downeight cents to $3.69 US a pound, adding to its 3.5 per cent loss since May 1.

May bullion closeddown $34.60 to $1,604.00 US an ounce.

European markets were lower with London's FTSE 100 index off 1.72 per cent, Frankfurt's DAX down 1.95 per cent and the Paris CAC 40 dropping 2.78 per cent. Greek stocks slid to their lowest levels in two decades, with the benchmark ASE Index closing down 3.6 per cent.

Euro falls

The euro extended its decline against the greenback for a seventh day, falling 0.29 per cent to $1.30 US.

As the debate over austerity intensified, European Union President Herman Van Rompuy called for an informal summit of the 27 EU government leaders on May 23 to discuss economic growth and to prepare for a summit in June focused on job creation.

The call came as Germany and the European Commission declared EU nations must stick to their agreed budget cuts despite mounting voter discontent.

European Commission President Jose Manuel Barroso said there could be no fundamental change in direction.

"What member states have to do is be consistent, implementing the policies that they have agreed," Barroso told reporters on the eve of Europe Day, which celebrates the ever closer cooperation between the nations of the Continent. "Now, the key is implementation."

But officials in Berlin and Brussels also promised some new efforts to boost growth to alleviate economic hardship.