- Title: MARKETS-STOCKS/USA OPEN Wall Street falls as Greek crisis worsens
- Date: 29th June 2015
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (JUNE 29, 2015) (REUTERS) (SOUNDBITE) (English) ED DEMPSEY, CHIEF INVESTMENT OFFICER, PENSION PARTNERS, SAYING: "We don't know where this process goes. Does it involve default? Does it involve Greece staying in the euro, and perhaps Greece does default and still remains in the euro. The door to the unknown, unknown has now been opened
- Embargoed: 14th July 2015 13:00
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- Topics: General
- Reuters ID: LVA2W776YVN9BNMP6O80ZX39X2RM
- Aspect Ratio: 16:9
- Story Text: U.S. shares fell in early trading on Monday (June 29), with all Dow stocks opening down, after Greek bailout talks collapsed, intensifying fears that it could be the first country to exit the euro zone.
The S&P 500 and the Nasdaq Composite fell around 0.7 percent as markets around the world slumped on fears that other European countries would suffer if Greece defaults.
Ed Dempsey of Pension Partners in New York said the effects on the U.S. economy and markets are largely psychological, as the Greek economy is small and the U.S. banks have put in place protections against this sort of financial shock.
"The U.S. banks have largely been de-risked of that sort of derivative exposure to Greece. Most of the Greek debt is held by the ECB or its surrogates and lastly Greece is not an economic issue. this is not an economic problem. Greece is roughly two percent of Eurozone GDP, a far smaller percent of world GDP," said Dempsey.
"This is really an issue about confusion and how do markets tease out and deal with the confusion about what might happen," he added.
The European Central Bank froze funding to Greek banks, forcing Athens to shut banks for a week to keep them from collapsing.
S&P 500 index futures fell nearly 2 percent in premarket trading, though indexes pared their losses in early trading after a Greek government official said some banks would open on Thursday for the payment of pensions.
Greece faces default if it does not repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund on Tuesday.
"We don't know where this process goes. Does it involve default? Does it involve Greece staying in the euro, and perhaps Greece does default and still remains in the euro. The door to the unknown, unknown has now been opened," said Dempsey.
Adding to the uncertainty, Chinese stocks closed sharply lower after a volatile day of trading despite surprise monetary easing by the central bank.
The Federal Reserve Bank of Dallas will issue manufacturing outlook survey for June at 10:30 ET (1430 GMT).
Investors have been keeping a keen eye on data to see if the U.S. economy has recovered from a slow start at the beginning of the year. The Federal Reserve has said it will raise rates when it sees a sustained rebound in the economy.
A September interest rate hike is "very much in play" if the U.S. economy continues to strengthen, though the Federal Reserve could also wait until December to start tightening policy, New York Fed President William Dudley told the Financial Times in an interview.
At 9:56 a.m. EDT the Dow Jones industrial average was down 123.75 points, or 0.69 percent, at 17,822.93, the S&P 500 was down 13.68 points, or 0.65 percent, at 2,087.81 and the Nasdaq Composite was down 39.16 points, or 0.77 percent, at 5,041.35.
Nine of the 10 major S&P 500 sectors were in the red with financials falling 1 percent.
Declining issues outnumbered advancers on the NYSE by 2,268 to 581. On the Nasdaq, 1,950 issues fell and 539 advanced.
The S&P 500 index showed one new 52-week high and 19 new lows, while the Nasdaq recorded 28 new highs and 57 new lows. - Copyright Holder: REUTERS
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