US stocks heads lower as Greece debt talks proceed

Jonathan Loynes, Chief European Economist at Capital Economics, said, “It is still just about possible to imagine some sort of agreement coming together which would keep Greece inside the currency union, in the short term at least”.

Among Dow members, Wal-Mart Stores gained 0.9 per cent to lead the blue-chip index, but General Electric fell 1.8 per cent and Intel lost 1.7 per cent. The Nasdaq composite fell 14 points, or 0.3 percent, to 4,994.

Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of June. The report was seen as a huge positive and has many traders and analyst believe that the USA economy could grow by close to 3 percent during the second half of the year after contracting during the first quarter due to the harsh winter conditions and stronger dollar. Nine of the 10 industry groups in the Standard and Poor’s 500 index were down. “The market remains faithful that the ECB and other European institutions have done an adequate job firewalling the eurozone against Greece“. Government borrowing rates for Italy and Spain rose only marginally. Prices also reflected worries that Iranian crude held back by sanctions will soon hit the market as talks with the USA over Iran’s nuclear program continue to progress.

The USA benchmark 10-year bond yield touched a session low of 2.194%.

The “No” vote in Greece heard around the world’s financial markets Sunday is weighing on pre-market trading on Wall Street, but the losses so far have been muted. Finance ministers and leaders from the region meet later today.

Over months of negotiations, Varoufakis’ relations with his peers in the 19-country eurozone had deteriorated significantly.

European Commission Vice President Valdis Dombrovskis said the commission is not able to negotiate a new bailout plan for Greece without a new mandate from the Eurogroup. E-mini Dow futures dropped 167 points, or 1%, to 17482, and e-mini Nasdaq-100 futures lost 41 points, or 0.9%, to 4388.

The MSCI Asia Pacific Index fell 0.4% to 144 as of 11:02 a.m.in Tokyo after falling 2% on Monday. Britain’s FTSE 100 dropped 1.6 percent. South Korea’s Kospi fell 2.4 percent.

“The market seems to be at the mercy of the most recent sound bite out of Brussels or Athens”, said Tom Mangan, who helps oversee about US$6.4 billion as money manager at James Investment Research in Xenia, Ohio.