By Anora Mahmudova and Sara Sjolin, MarketWatch
Greeks reject terms of bailout package
U.S. stocks tumbled in early trade Monday a day as investors
world-wide dumped risky assets such as equities following Greece's
overwhelming rejection of bailout terms, which Wall Street views as
increasing the chances of the country exiting the eurozone.
The main indexes, which recorded two straight weeks of losses,
moved lower in early trade.
The S&P 500 fell 10 points, or 0.6% to 2,067. The Dow Jones
Industrial Average dropped 100 points, or 0.6%, to 17,629. The
Nasdaq Composite fell 24 points, or 0.5% at 4,985.
The declines tracked losses on the European stock markets
(http://www.marketwatch.com/story/european-stocks-knocked-down-as-greek-voters-say-no-to-creditors-demands-2015-07-06),
where the Stoxx Europe 600 index erased 1.2% to 378.68 and
Germany's DAX 30 index tumbled 1.6% to 10,879. Asian shares also
mostly slumped
(http://www.marketwatch.com/story/china-shares-rise-after-beijings-weekend-rescue-2015-07-05).
Greece's rejection of austerity: The global selloff came after
more than 61% of Greeks voted "no"
(http://www.marketwatch.com/story/in-rebuke-to-europe-greeks-vote-resounding-no-to-bailout-terms-2015-07-05)
in Sunday's referendum on austerity measures put forward by the
International Monetary Fund and the eurozone as terms for further
bailout aid. The Alexis Tsipras-led government will now try to
renegotiate a new bailout package with the lenders, but economists
fear the lenders are unwilling to accept looser reforms, raising
concerns that Greece will exit the euro. Read: Greek debt crisis:
Brace for possible return to the drachma, say analysts
(http://www.marketwatch.com/story/greek-debt-crisis-brace-for-possible-return-to-the-drachma-say-analysts-2015-07-06)
"The outcome of the Greek referendum has significantly increased
the risk of Greece leaving the eurozone, which is now by far the
most likely outcome," said Erik Nielsen, global chief economist at
UniCredit, in a note. "The process may start within days or weeks,
but it won't be a smooth ride into a new currency. It'll be chaos
with political ramifications."
The euro also was hit hard by the developments
(http://www.marketwatch.com/story/euro-falls-against-rivals-as-greek-voters-reject-austerity-demands-2015-07-06)
in Greece, changing hands at $1.1032, down from $1.1115 late Friday
in New York. The shared currency traded as low as $1.0952 earlier
on Monday, according to FactSet.
Greece's stock market, the Athex Composite , remained closed
after being shut last week. The country's banks also stayed closed.
The Global X FTSE Greece 20 ETF (GREK) was still open for trade,
however, tumbling 9.7%.
U.S. data: On a light day for data, the only major release is
the ISM nonmanufacturing index due at 10 a.m. Eastern Time.
Economists polled by MarketWatch expect a reading of 55% for June,
down from 55.7% in May
(http://www.marketwatch.com/story/ism-services-index-comes-in-below-forecast-for-may-at-557-2015-06-03).
Investors are closely watching data coming out of the U.S. in
trying to gauge when the Federal Reserve will hike interest rates.
The top-tier nonfarm payrolls report out on Thursday missed analyst
expectations
(http://www.marketwatch.com/story/us-adds-223000-jobs-in-june-as-unemployment-falls-to-7-year-low-2015-07-02),
although it showed unemployment fell to a seven-year low. U.S.
stocks were closed for Independence Day on Friday and ended
Thursday
(http://www.marketwatch.com/story/us-stock-futures-steady-ahead-of-june-jobs-report-2015-07-02)
with a second straight week of losses as investors grappled with
uncertainty over Greece.
Corporates: Shares of Aetna Inc. (AET) skidded 7.1% after the
health insurer on Friday said it would buy Humana Inc
(http://www.marketwatch.com/story/aetna-to-buy-humana-in-37-billion-merger-deal-2015-07-03).(HUM)
for $37 billion, after weeks of merger talks. Humana shares rose
0.7%.
Allergan Plc (AGN) shares may be active after the Botox maker
said Monday that it has agreed to buy Oculeve, a maker of novel
dry-eye disease treatments, for $125 million in cash.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/a-schulman-dollar-tree-tesla-shares-in-focus-2015-07-06).
Other markets:Crude oil
(http://www.marketwatch.com/story/oil-tumbles-4-after-greek-voters-reject-creditors-reform-proposal-2015-07-06)
plunged 4.4% to $54.41 a barrel ahead of the Tuesday deadline over
nuclear deal with Iran. Gold futures
(http://www.marketwatch.com/story/gold-little-changed-as-fed-trumps-greek-drama-2015-07-06)
were virtually unchanged at $1.163.40 an ounce.
The dollar traded mostly higher against other major currencies,
with the ICE dollar index up 0.4% at 96.44.
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