Stocks fall on Greece, rate concerns; U.S. dollar dips

Mon Jun 8, 2015 4:32pm EDT
 
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By Sinead Carew

NEW YORK (Reuters) - U.S. and European stocks declined on Monday as investors fretted about Greece and the timing of a U.S. rate hike, while bond yields rose and the dollar fell.

The U.S. currency extended its decline in the afternoon on skepticism about the American economy even after President Barack Obama denied a wire-service report that claimed to cite his remarks on the greenback's strength.

Investors sold U.S. equities after Friday's strong jobs report heightened expectations for a Federal Reserve interest rate hike as soon as September. Several experts said markets would likely remain choppy ahead of a rate hike.

The Dow Jones industrial average .DJI fell 82.91 points, or 0.46 percent, to 17,766.55, the S&P 500 .SPX lost 13.55 points, or 0.65 percent, to 2,079.28 and the Nasdaq Composite .IXIC dropped 46.83 points, or 0.92 percent, to 5,021.63.

Greece's bailout program also weighed on markets as it expires at the end of June and the country faces potential default on its debts.

Greek officials met on Monday with European Union Economics Commissioner Pierre Moscovici on what reforms Greece must implement to get new loans, but there was no new proposal from Athens that its creditors could agree to, an EU official said.

The uncertainty renewed demand from investors for lower-risk government debt, causing U.S. Treasury yields to fall, with benchmark yields retreating from seven-month highs.

"It really appears there's just not a deal happening there. The rhetoric is looking like we're really going to see a Grexit," Stephen Massocca, Chief Investment Officer, Wedbush Equity Management LLC in San Francisco referring to concerns that Greece will end up exiting the Euro zone.   Continued...

 
Traders work at their screens in front of the German share price index DAX board at the stock exchange in Frankfurt, Germany June 8, 2015.       REUTERS/Stringer