Wall Street was lower in late morning trading on Monday, with the Dow Jones Industrial Average .DJI in negative territory for the year, as Greece came closer to a debt default after talks with its international creditors fell apart.
Talks between Greece and its creditors broke up after less than an hour on Sunday, raising the prospect of Athens being unable to repay $1.8 billion owed to the International Monetary Fund by the end of this month.
“The market has had a long time to prepare for (a Greek default) and has done what it can with what it sees on the horizon but with situations like this, there is always an unknown factor,” said Ashwin Bulchandani, head strategist at asset manager MatlinPatterson in New York.
“Uncertainty freaks the market out. It makes it very, very nervous.”
Investors were also nervous ahead of the Federal Reserve’s two-day policy meeting starting Tuesday. Upbeat consumer sentiment and other data last week added to views the economy is regaining momentum and could encourage the Fed to raise interest raise as soon as September.
Easy monetary policy has driven borrowing costs lower and helped stocks and bond prices to record highs in recent years.
The last time U.S. stocks saw a 10 percent correction was in May 2011, according to RBC Capital Markets.
At 11:13 a.m. ET the Dow Jones industrial average .DJI was down 95.46 points, or 0.53 percent, at 17,803.38, the S&P 500 .SPX was down 7.83 points, or 0.37 percent, at 2,086.28 and the Nasdaq Composite .IXIC was down 26.78 points, or 0.53 percent, at 5,024.33.
All of the 10 major S&P 500 sectors were lower, with the technology index .SPLRCT leading the decline with a 0.71 percent drop.
Microsoft’s (MSFT.O) 1.3 percent fall weighed the most on the Nasdaq and the S&P while United Technologies’ (UTX.N) 1.8 percent drop was the biggest drag on the Dow.
Data on Monday showed that manufacturing activity in New York State slowed in June, while U.S. industrial production unexpectedly fell in May, mainly because of a strong dollar and a drop in spending by energy companies.
However, U.S. homebuilder sentiment rose more than expected in June, hitting its highest level since September.