US stocks nose-dive on looming Greek debt default

A screen above the trading floor of the New York Stock Exchange, shows the closing number for the Dow Jones industrial average, Monday, June 29, 2015. Stocks are closed with their biggest losses of the year as investors worry about fallout from Greece’s worsening debt crisis. AP

NEW YORK–US stocks tumbled Monday, joining global equity markets in retreat on the looming threat of a Greek debt default.

The Dow Jones Industrial Average fell 350.33 points (1.95 percent) to 17,596.35.

The broad-based S&P 500 sank 43.85 (2.09 percent) to 2,057.64, while the tech-rich Nasdaq Composite Index dropped 122.04 (2.40 percent) to 4,958.47.

Monday marked the first day of 2015 that the S&P 500 swung more than 2 percent and the benchmark index’s biggest loss since April 10, 2014.

Greece shuttered its banks and imposed capital controls to halt panic cash withdrawals ahead of a July 5 referendum on creditor proposals.

Standard & Poor’s downgraded Greece’s credit rating deeper into junk territory and estimated the odds at 50 percent of the debt-wracked country leaving the eurozone.

“There is a lot of nervousness in terms of how all this is going to play out,” said Bill Lynch, director of investment at Hinsdale Associates.

But Alan Skrainka, chief investment officer at Cornerstone Wealth Management, said Monday’s losses were far from catastrophic.

“I believe markets outside of Greece have responded in a relatively calm way given the surprise nature” of Greece’s announcements, he said.

The Greek economy is relatively small and a default “offers very little risk for the global economy or for the rest of Europe.”

All 30 members of the Dow ended in the red, with the biggest drops in DuPont and Visa (both -3.0 percent).

Banking shares were hard-hit as the Greek saga was seen as potentially delaying a Federal Reserve decision to hike interest rates. JPMorgan Chase fell 2.5 percent and Bank of America lost 3.0 percent.

Tech shares such as Facebook (-2.5 percent) and Priceline (-2.9 percent) fell sharply, as did biotech companies Amgen (-4.1 percent) and Gilead Sciences (-3.4 percent).

Dow member General Electric lost 1.7 percent after announcing it will sell its vehicle fleet management and financing services in the United States and three other countries to Canadian firm Element Financial for $6.9 billion.

Food services company Sysco fell 2.2 percent after abandoning a plan to acquire US Foods following the opposition of US antitrust regulators. Sysco will pay a $300 million termination fee to US Foods. The takeover had been valued about $8 billion, including debt.

Bond prices leaped. The yield on the 10-year US Treasury fell to 2.32 percent from 2.47 percent Friday, while the 30-year dropped to 3.09 percent from 3.24 percent. Bond prices and yields move inversely.

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