MARKETS-STOCKS/USA OPEN Wall Street opens slightly higher ahead of Greece summit. Oil continues its recent slump.

Record ID: 148106

  • Title: MARKETS-STOCKS/USA OPEN Wall Street opens slightly higher ahead of Greece summit. Oil continues its recent slump.
  • Date: 7th July 2015
  • Summary: NEW YORK CITY, NEW YORK, UNITED STATES (JULY 7, 2015) (REUTERS) (SOUNDBITE) (English) ERIC WIEGAND, SENIOR PORTFOLIO MANAGER, PRIVATE CLIENT RESERVE, U.S. BANK, SAYING: "With regard to energy prices we think that we'll continue to see a great deal of volatility. We're in an environment where the potential for increased supply and an absence of demand growth is creating an
  • Embargoed: 22nd July 2015 13:00
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  • Topics: General
  • Reuters ID: LVAB5NESIBKKK3NNG26G4GI7QUW
  • Aspect Ratio: 16:9
  • Story Text: U.S. stocks opened higher before quickly reversing course on Tuesday (July 7) morning, setting the stage for another volatile session as investors await the outcome of a euro zone summit that will attempt to find a solution to the ongoing debt crisis in Greece.
    The summit begins at 12 p.m. EDT (1600 GMT) in Brussels and Greek Prime Minister Alexis Tsipras is under pressure to negotiate a deal as the country is running out of cash and the European Central Bank has tightened funding.
    Greece's next debt deadline is July 20 when it has to repay $3.9 billion (USD) of bonds to the ECB. Finnish finance minister Stubb said the currency bloc was not looking at bridge finance for Greece "at this stage".
    "It's been a very dramatic situation unfolding. It's been tragic in many instances as far as the Greek citizenry is concerned," said Eric Wiegand of U.S. Bank.
    "We're seeing fortunately that there is little likelihood that there will be a contagion spreading of this to other economies and countries. But it seems that we're in a very critical phase right now as far as pending negotiations between Greece and the creditor nations up until this July 20 payment that's required to the European Central Bank," added Wiegand.
    The uncertainty around Greece comes as the quarterly earnings season in the United States draws near. Alcoa kicks off the season with its report on Wednesday (July 8). Profit is expected to have fallen 3 percent in the April-June quarter, according to Thomson Reuters data.
    At 9:46 a.m. EDT (1346 GMT) the Dow Jones industrial average was down 43.29 points, or 0.24 percent, at 17,640.29, the S&P 500 was down 4.58 points, or 0.22 percent, at 2,064.18 and the Nasdaq Composite was down 22.30 points, or 0.45 percent, at 4,969.64.
    Six of the 10 major S&P 500 sectors were lower. The materials index index led the declines with a 1.1 percent fall, weighed down by a strong dollar. The dollar index was up 0.81 percent at $97.05, its highest level in a month.
    A stronger dollar will have impacted corporate results in the past quarter as it slows foreign demand for U.S. goods, impacting trade.
    Data on Tuesday showed that the U.S. trade deficit widened less than expected in May, suggesting economists might raise slightly their forecasts for economic growth in the quarter.
    U.S. crude futures tumbled 3 percent to lead the oil complex down for a second straight day on Tuesday as an investor flight to safe havens continued from worries of a Greece exit from the euro zone and China's deepening stock market losses.
    Iran's determination to seal a nuclear deal with global powers to bring more of its crude to an oversupplied market and the restart of a key oil terminal in Libya also weighed on oil prices.
    Robert Yawger of Mizuho Securities USA said the main reason for the decline in U.S. crude prices is simple case of oversupply.
    "There's so much domestic production that the markets still overwhelmed the refinery demand and managed to put crude oil into storage. That was not expected and that put pressure on the market. The market's been down 12 percent in the last three days coming into today. That's the biggest three-day slide in I believe since December. So that was a big three day event and that has the market under siege here," said Yawger.
    U.S. crude was down $1.75, or 3.3 percent, to $50.78 by 10:19 a.m. EDT (1419 GMT). It plunged 7 percent on Monday, its biggest percentage drop in a day since early February, and more downside momentum could push it to test the six-year low of $42.03 set in mid-March, technical analysts said.
    Brent crude fell $1.12, or nearly 2 percent, to $55.42.
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