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Stocks tumble as Greek debt talks falter again

The U.S. stock market enters the new week in worry mode as investors react to the ongoing stalemate between Greece and its creditors and brace for this week’s Federal Reserve meeting on interest rate policy. Stocks tumbled in early trading as the Dow Jones industrial average was down more than 100 points, or 0.7%. The Standard & Poor’s 500 index dropped 0.5% and the Nasdaq composite index fell 0.6%.the-percentage-of-americans-playing-the-stock-market-is-at-an-all-time-low

Wall Street is coming off a volatile week, which saw the Dow end a four-day losing streak with a 236-point gain Wednesday only to falter Friday with a nearly 141 point swoon on renewed fears of a possible Greek default and exit from the eurozone. Last week also saw turbulence in the bond market, with the yield on the 10-year U.S. Treasury note touching 2.5% for the first time in nine months before bond prices rallied – and yields dropped back – on Thursday and Friday amid the ongoing uncertainty related to Greece’s unproductive talks with its creditors. The 10-year yield was trading at 2.36%, down from 2.40% Friday.

This week on Wall Street is shaping up to be another volatile one and stocks fell Monday, due in large part to Greece’s inability to seal a deal with its creditors with a month-end deadline to strike an agreement coming up fast. Investors will also be in search of clues from the Federal Reserve this week on the so-called liftoff of its interest rate hikes. Last week economic data ranging from retail sales to consumer confidence all came in solid, putting the Fed on a collision course with eventual rate hike.

The Fed kicks off a two-day meeting on rates Tuesday and will issue a policy statement Wednesday. Fed chairwoman Janet Yellen will also face off with the press after Wednesday’s meeting breaks up, and will discuss the Fed’s current economic outlook and hopefully provide investors with a roadmap as to when the Fed plans to raise rates and why. Wall Street gets fresh readings on May industrial production today, May housing starts tomorrow and on Thursday the all-important May CPI, which will provide key data on inflation at the consumer level.

Heading into the week, however, the U.S. stock market remains stuck in a trading range but in decent shape. All three major U.S. stock indexes are still trading near their all-time closing highs notched last month. The Dow Jones industrial average kicks off the week 2.3% off its record high, while the Standard & Poor’s 500 is off 1.7% from its peak and the Nasdaq composite is 1.1% below its record close.

Overseas, European markets tumbled with France’s CAC 40 shedding 1.6%, Germany’s DAX dropping 1.9% and Britain’s FTSE 100 losing 0.9%. The European Commission said Sunday that talks in Brussels aimed at heading off a Greek default failed to come up with a deal. Greece was expected to present creditors with a new proposal to try to move the talks along, but the AP reported that a deal to resolve the crisis still isn’t at hand with two weeks left before the default deadline. In Asia, Japan’s Nikkei 225 index was down 0.1% and Hong Kong’s Hang Seng index dropped 1.5%. Moves by regulators to tighten up on margin financing in China sent the Shanghai Composite 2% lower.