December 14, 2017
Thursday, July 2, 2015

Wall St edges down on Greece worries

US stocks closed down slightly today after the International Monetary Fund warned Greece ahead of its Sunday referendum that it faces a huge financial hole, and mixed jobs data dampened the US economic outlook.

While the IMF was warning that Greece needed an extra 50 billion euros over the next three years to stay afloat, Greek Prime Minister Alexis Tsipras was urging voters to reject a bailout offer from lenders and saying he hoped to sign a new deal on Monday.

Trading volume remained low ahead of a long weekend. US markets will not open on Friday in observance the Independence Day holiday.

Slowing US job growth in June tempered expectations for a Federal Reserve interest rate increase in September.

Nonfarm payrolls increased 223,000 last month, below the 230,000 expected by economists polled by Reuters, while average hourly earnings were unchanged in June, taking the year-on-year increase to a paltry 2.0 percent.

The Fed has said it will raise rates only when data shows a sustained economic recovery.

The utilities sector was the best performer in the S&P, rising 1.4 percent. That sector has been battered by a 10.6 percent decline so far this year as investors have been switching positions in anticipation of an interest rate increase.

Investors also faced uncertainty over volatility in China's stock markets and a debt crisis in Puerto Rico.

The Dow Jones industrial average fell 27.8 points, or 0.16 percent, to 17,730.11; the S&P 500 dipped 0.64 points, or 0.03 percent, to 2,076.78, and the Nasdaq Composite dropped 3.91 points, or 0.08 percent, to 5,009.21.

Meanwhile, European shares fell under pressure from concerns over Greece's debt crisis and with a rebound in the euro weighing on exporters who typically benefit from the single currency's weakness.

Adding to the negative momentum was Sweden's Electrolux , which dropped after a US legal challenge to a planned takeover.

Electrolux, which owns the Frigidaire, Kenmore and Tappan brands, dropped about 10 percent after the United States filed a lawsuit to prevent it from buying General Electric's appliance business.

However, German utility stocks bucked the trend after plans for a coal levy were scrapped. RWE climbed 5 percent, while rival E.ON advanced 1.5 percent.

The pan-European FTSEurofirst 300 index fell 0.4 percent while the euro zone's blue-chip Euro STOXX 50 index declined 0.9 percent.

Traders said uncertainty over Greece meant many investors were unwilling to buy. Greece defaulted on a loan to the International Monetary Fund on Tuesday and faces a referendum on Sunday that may decide its future in the euro zone.

Another reason for the pullback was a rebound in the euro, which rose against the US dollar after weaker-than-expected US employment data.

The euro's move weighed on European car stocks, since a weak euro typically helps European automakers export more of their goods overseas.
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Tags:  US  stock market  Europe  Nikkei  

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