Concerns over Greece”s latest effort to avoid a default weighed on U.S. financial markets Monday.
The Dow Jones industrial average slipped 107.67 points, or 0.6 percent, to 17,791.17. The Standard & Poor”s 500 index slid 9.68 points, or 0.5 percent, to 2,084.43. The Nasdaq composite lost 21.13 points, or 0.4 percent, to 5,029.97.
Monday”s slide got started early after weekend negotiations between Greece and its creditors failed to get the struggling nation closer to a bailout deal.
Greek leaders want to get access to the final 7.2 billion euros ($8.2 billion) of their bailout program that”s needed to repay debts and avoid a possible default that could trigger an exit from the euro; the bailout package expires at the end of the month.
“All eyes, including our own, are on Greece,” said Erik Davidson, chief investment officer for Wells Fargo Private Bank. “This is a grand experiment and if it were to go awry, it would certainly have implications.”
Investors also got some discouraging news from the Federal Reserve Bank of New York”s latest Empire State manufacturing index. This month”s reading fell to negative 2, which means manufacturing activity is contracting. The report suggested manufacturers are still being held back by a strong dollar and cutbacks in investment by oil and gas drillers.
Traders did get some good news on the homebuilding sector. A survey of U.S. homebuilders vaulted to the highest level since last fall, and separate measures of builders” sales expectations jumped to housing boom-era levels.
The report helped lift shares of most homebuilders. California builders Standard Pacific and Ryland Group, which announced late Sunday that they will combine later this year, were among the biggest gainers in the sector.
Standard Pacific added 47 cents, or 5.6 percent, to $8.83. Ryland rose $2.23, or 5.2 percent, to $45.02.
Nine of the 10 sectors in the S&P 500 fell, with industrials stocks leading the declines.
Beyond the day”s action, investors were looking ahead to Wednesday”s meeting of the Federal Reserve”s policymakers, when the central bank is expected to deliver an update on its interest rate policy.
Wall Street has been trying to gauge when the Fed will begin raising its key interest rate from near zero. Many economists anticipate such a move could come as soon as September.
“When the doctor comes in and tells you we”re going to take you off your medication it”s usually good news,” said Davidson. “At the same time, there”s a prevailing sentiment that much of the run-up in the stock market has been a direct result of stimulus.”
Benchmark U.S. crude oil continued to fall, losing 44 cents to close at $59.52 a barrel on the New York Mercantile Exchange. The contract hit a high for the year last Wednesday but has been falling since then.
U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.36 percent from 2.39 percent late Friday.
Precious and industrial metals futures closed mixed. Gold rose $6.60 to $1,185.80 an ounce, silver rose 26 cents to $16.08 an ounce and copper fell three cents to $2.65 a pound.
In energy futures trading: Brent crude fell $1.26 to $62.61 a barrel, wholesale gasoline slipped 2 cents to $2.10 a gallon, heating oil eased 2 cents to $1.87 a gallon, and natural gas rose 14 cents to 2.90 per 1,000 cubic feet.