U.S. stocks retreated, as equities drop for a second day, after weekend negotiations between Greece and its creditors broke down.
The Standard & Poor’s 500 Index tumbled 0.9 percent to 2,076.06 at 9:32 a.m. in New York, after finishing Friday little changed for the week.
The latest round of bailout talks between Greece and its creditors ended in acrimony after leaders met for just 45 minutes in Brussels on Sunday. A June 18 meeting of euro-area finance ministers may now decide whether Greece will avert default and stay within the currency bloc.
The specter of higher borrowing costs is also keeping U.S. equities in check, even after data last week signaled a pickup in consumer spending. The S&P 500 finished its seventh straight week with a move of less than 1 percent.
The Federal Reserve begins a two-day meeting tomorrow, at which officials are expected to leave interest rates unchanged. Still, improving economic reports since the central bank’s last session have pushed the probability for a September increase to 53 percent, data compiled by Bloomberg show. Chair Janet Yellen may provide further clues at a press conference on June 17.
Manufacturing data today showed improvement from early year weakness remains uneven. Factory production unexpectedly declined in May as the slump in energy output deepened. Production of consumer energy products declined for a third consecutive month, exacerbating a decrease in other non-durable goods such as foods and chemicals that swamped continued gains among automakers.
The sluggish data signal that a stronger dollar and decrease in fuel prices are still rippling through the economy, holding back American factories. Data earlier showed manufacturing activity in the New York region unexpectedly contracted this month amid a drop in new orders.
Source : Bloomberg