Wall St lower as Greek deal awaited
07/02/2012 at 17:04
U.S. stocks edged lower at the open today as investors awaited the outcome of discussions on a bailout package for Greece from international lenders that would help the country avoid a chaotic default.
Greek Prime Minister Lucas Papademos negotiated through most of the night with lenders from the European Union and International Monetary Fund over more fiscal reforms as trade unions staged a national strike against more cuts.
A Greek government official said the nation is preparing the text of an agreement on a 130-billion euro bailout that must be put to political leaders for approval, suggesting Athens had largely wrapped up talks with lenders.
"Markets would love to see some certainty, and we don't have any of that at the moment," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago
"On the equities side, we've come a long way, and we are getting into overbought territory, so most of us are expecting a bit of a pullback or a period of consolidation - the depth of the pullback really depends on Greece and the European debt problems." A disorderly Greece debt default could lead to increased fiscal problems for weaker members of the euro zone and dampen the U.S. recovery. European shares fell on the Greece talks and after disappointing results from investment bank UBS AG and shipbuilder Alfa Laval AB. The FTSEurofirst 300 index of top European shares was down 0.7 percent
The benchmark S&P index had risen for five straight weeks on the back of improving U.S. economic data, punctuated by the Friday payrolls report, to lift the index up almost 7 percent for the year. A light economic calendar this week has shifted investor focus back to the euro zone
The Dow Jones industrial average dropped 38.30 points, or 0.30 percent, to 12,806.83. The Standard and Poor's 500 Index dropped 4.83 points, or 0.36 percent, to 1,339.50. The Nasdaq Composite Index dropped 9.72 points, or 0.33 percent, to 2,892.27
C Reuters