After reflecting an improvement in US economic data, equities fell as investors pondered the possibility of a resolution – or breakdown – of Greek debt talks. After a Berlin meeting between the main Europeans involved and the IMF, the mood over the Mediterranean nation’s crisis was uncertain as a Friday IMF deadline loomed for a part-repayment of the 1.6-billion euros owed to creditors. Fears of a default recurred although Greece has submitted its own proposals for a way out of the impasse. The possibility of a Fed rate rise also contributed to the slight downturn. – PW
Roxana Zega & Joseph Ciolli
(Bloomberg) – US stocks fell, after equities advanced for the first time in three sessions. Investors were weighing pros and cons of potential progress in Greece’s debt talks, and biotechnology shares retreated.
“If the situation in Greece deteriorates, it leaves a lot of downside potential for the US stock market,” said Matt Maley, an equity strategist at Miller Tabak & Co in Newton, Massachusetts. “The focus is on Friday’s big employment number, and there’s a lot of indecision. Yesterday was a microcosm of what we’ve seen for several months now — big intraday swings, only to end up little changed.”
Health-care companies slumped, with the Nasdaq Biotechnology Index down 0.9 percent. Delta Airlines Inc dropped 2.6 percent after cutting its forecast on a second- quarter revenue measure. JetBlue Airways Corp and American Airlines Group Inc lost at least 1.1 percent. Dollar General Corp. jumped 3 percent after quarterly profit exceeded analysts’ estimates.
The Standard & Poor’s 500 Index dropped 0.3 percent to 2,106.50 by mid-morning in New York, after having fallen as much as 0.6 percent. The Dow Jones Industrial Average declined 39.17 points, or 0.2 percent, to 18,001.20, while the Nasdaq Composite Index retreated 0.3 percent.
European leaders and the head of the International Monetary Fund (IMF) agreed to step up the intensity of talks over Greece’s fate after a meeting in Berlin on how to prevent the Mediterranean nation defaulting. The Greek government — which said it hadn’t received any draft plan — has submitted its own proposal aimed at breaking the deadlock, according to Prime Minister Alexis Tsipras.
Greece faces a debt repayment to the IMF on Friday. While the country claims it can make the payment, it’s the smallest of four totalling almost 1.6-billion euros ($1.75-billion) this month.
Investors will also continue to assess economic data for potential clues on the timing of a Federal Reserve interest-rate increase. Data today showed factory orders in April slipped more than economists’ had forecast. Labour market reports on private payroll growth; jobless claims; and the government’s monthly non-farm payrolls data are all due later this week.
The economy added 227,000 jobs in May, compared with April’s 223,000, and the unemployment rate will remain at 5.4 percent, economists predict.
The central bank has indicated that any increase in borrowing costs would be shallow and gradual. Economists forecast the Fed will raise rates in September.