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US: Stocks retreat as Greece talks stall


[NEW YORK] US stocks followed European equity markets lower on Wednesday, dropping sharply on signs of fresh problems in talks between Greece and its international creditors aimed at preventing a Greek debt default.

The Dow Jones Industrial Average dropped 178.00 (0.98 per cent) to 17,966.07.

The broad-based S&P 500 fell 15.62 (0.74 per cent) to 2,108.58, while the tech-rich Nasdaq Composite Index dropped 37.68 (0.73 per cent) to 5,122.41.

The tone of talks between Greece and its international creditors sharpened with Greek Prime Minister Alexis Tsipras lashing out at their counterproposal to the government's reform plan.

Peter Cardillo, chief market economist at Rockwell Global Capital, said Greece was weighing on stocks, but added that some investors were selling off before the second quarter ends next Tuesday.

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DuPont posted the biggest loss in the Dow, falling 3.4 per cent after analysts at JPMorgan Chase raised questions about the ability of Chemours to pay its dividend when the performance chemicals unit is spun off from DuPont. Credit Suisse released a similar report on Monday. Chemours will begin trading on July 1.

Dow member Boeing gave up 1.0 per cent after naming Dennis Muilenburg as chief executive, effective July 1, succeeding James McNerney, who will retire after holding the top spot for 10 years. The company is also reportedly slowing production of its 747-8 jet due to weak air cargo demand.

US agriculture and seed giant Monsanto fell 5.7 per cent as it projected break-even results for the current quarter.

The company also restated its hope to acquire Syngenta despite repeated rejections by the Swiss company.

Streaming video company Netflix fell 0.4 per cent after activist investor Carl Icahn announced he sold his remaining shares. The company also announced a seven-for-one stock split.

Dow member Goldman Sachs lost 1.8 per cent and Citigroup fell 1.3 per cent after both were downgraded by Deutsche Bank.

Food distributor Sysco advanced 3.1 per cent after a federal judge blocked its proposed US$3.5 billion takeover of US Foods due to opposition from antitrust regulators. Sysco said it was assessing its legal options, "including the merits of terminating the merger agreement."

Homebuilder Lennar advanced 4.2 per cent after announcing second-quarter earnings of US$183 million, up 33 per cent from the year-ago period. Chief executive Stuart Miller reported "steady improvement" in the market for new homes.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.38 per cent from 2.41 per cent Tuesday, while the 30-year declined to 3.16 per cent from 3.20 per cent. Bond prices and yields move inversely.


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