Stocks Sink As Greece Debt Deadline Nears

MarketsDow Jones Newswires

U.S. stocks declined Friday amid uncertainty about a Greek bailout deal.

The Dow Jones Industrial Average dropped 140 points, or 0.8%, to 17898.4. The S&P 500 index fell 14 points, or 0.7%, to 2094, and the Nasdaq Composite Index declined 14 points, or 0.7%, to 5051.

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Losses were broad-based, with all 30 Dow components and all S&P 500 sectors in negative territory. Energy and Healthcare stocks in the S&P 500 fell the most, down over 1% each.

Traders said declines were driven by negative headlines about Greece's financing talks, which also weighed on European stocks. "You've certainly got some nervous selling after a couple of days of gains," said Seth Setrakian, co-head of global equities at First New York Securities. "I don't see who's going to run up to the plate and stick their head up," he added.

Greek stocks led European markets lower, sliding 5.9%. The Athens stock market had closed before the International Monetary Fund said Thursday it had stopped negotiations with Greece due to a lack of progress. German Chancellor Angela Merkel on Friday called on all parties to return to the negotiating table. Germany's DAX fell 1.2% and France's CAC slipped 1.4%.

Investors were also paring back their stock exposure ahead of next week's Federal Reserve meeting, traders said. While few expect the central bank to raise rates next week, Fed Chairwoman Janet Yellen could provide additional information on how soon such a move could come.

"It's really people preparing for Greece and the Fed next week," said Darren Wolfberg, head of U.S. cash equity trading at BNP Paribas. "People are selling equities and buying bonds. They are getting a bit more defensive," he added.

Treasury prices rose, pushing the yield on the 10-year Treasury note down to 2.396%.

Even with Friday's pullback, U.S. stocks are on pace to eek out a modest weekly gain. This week marks a departure from recent ones, in which the Nasdaq's gains have outpaced those of the Dow and S&P. For the quarter, the Dow has advanced 0.7% and the S&P has risen 1.3%, while the Nasdaq has rallied 3.2%.

Economic reports were positive Friday. In the latest sign inflation is stabilizing, the Labor Department said the producer-price index for final demand rose 0.5% in May from April. Core prices, which exclude the volatile food and energy categories, rose 0.1%. Economists surveyed by The Wall Street Journal had expected overall prices to rise 0.4% and core prices to advance 0.1%.

Friday's data also suggested consumers feel upbeat about the economy. The University of Michigan's preliminary June consumer sentiment index rose to 94.6 from May's final number of 90.7, beating expectations.

"It all looks pretty solid, in keeping with what you'd hope for to keep this economic recovery on track," said Colleen Supran, a principal at Bingham, Osborn & Scarborough, which manages $3.4 billion.

In commodity markets, gold futures were nearly flat at $1179.60 an ounce. Crude-oil futures fell 0.8% to $60.28 a barrel.

Twitter Inc. shares were little changed. The company said late Thursday Dick Costolo would step down as Twitter's chief executive.

FedEx Corp. shares slipped over 1%. The company said it would book a $2.2 billion pretax charge in its most recently ended quarter.