U.S., EU stocks close lower as Greece weighs
A setback in Greek debt talks weighed down U.S. and European shares Friday, with some investors also holding off bets ahead of a U.S. Federal Reserve policy meeting next week, while oil prices fell on concerns production may rise further.
The International Monetary Fund raised the stakes in Greece’s stalled debt talks Thursday, as its delegation left negotiations in Brussels because of “major differences” with Athens.
European and Greek politicians said on Friday talks would continue in a bid to reach a deal by June 18, but for traders it dented earlier optimism about a debt agreement.
“We are getting closer and closer to D-day and this take-it-or leave-it scenario,” said Derek Halpenny, European head of global market research at Bank of Tokyo Mitsubishi, referring to the deadline for the talks.
“But nobody in my view is ready to trade the (Greek exit) view yet. The expectation is still that a deal will be reached.”
Meanwhile, U.S. investors anticipated the Federal Reserve June 17 statement following its policy meeting, which they hope will provide some clues on timing of the first U.S. interest rate hike in almost a decade.
“Investors don’t want to make any big moves ahead of the meeting and Greece certainly continues to be a big factor,” said Adam Sarhan, chief executive of Sarhan Capital in New York.
Wall Street was lower in morning trading.
At 11:03 a.m. ET, the Dow Jones industrial average .DJI fell 173.83 points, or 0.96 percent, to 17,865.54, the S&P 500 .SPX lost 17.04 points, or 0.81 percent, to 2,091.82 and the Nasdaq Composite .IXIC dropped 38.21 points, or 0.75 percent, to 5,044.30.
Oil prices dipped after Saudi Arabia said it was ready to raise output further to meet strong demand.
Brent crude oil for July LCOc1 fell 65 cents to $64.45 a barrel, while U.S. crude CLc1 dropped 71 cents to $60.06.
U.S. Treasuries yields fell as lower stock prices and concerns about a Greek default spurred safe-haven demand for U.S. government debt ahead of the Fed policy meeting next week.
MSCI’s all-world country index .MIWD00000PUS fell 0.5 percent but was on track for its first weekly gain out of four.
