Stocks May Fall Sharply Amid Worries About Greece - U.S. Commentary

(RTTNews) - Stocks are likely to come under pressure in early trading on Monday amid ongoing concerns about the situation in Greece. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 177 points.

The downward momentum on Wall Street comes as the latest round of talks between Greece and its creditors broke down over the weekend.

Greek Prime Minister Alexis Tsipras subsequently called for a referendum on the bailout proposals by creditors on July 5th.

The country is required to make a 1.6 billion euro payment to the IMF on June 30th, and the Greek Prime Minister is seeking to get an extension until the referendum.

With the European Central Bank opting to freeze the emergency liquidity assistance for Greek banks in the wake of the referendum call, Greece decided to close its banks and imposed capital controls.

"The Greek Government's decision to call a referendum has elevated the crisis to a higher level," said Jonathan Loynes, Chief European Economist at Capital Economics. "While a deal may yet come together, a near-term Grexit now seems more likely than not."

Not long after the open, the National Association of Realtors is scheduled to release its report on pending home sales in the month of May.

Economists expect pending home sales to rise by 0.6 percent in May after jumping 3.4 percent in April to their highest level in nearly nine years.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Several other key U.S. economic reports are scheduled to be released later in the holiday-shortened week, including the Labor Department's closely watched monthly jobs report.

With traders focused on the latest developments regarding Greece, stocks turned in a mixed performance during trading on Friday. The Dow moved moderately higher on the day, but the Nasdaq pulled back further off its record highs.

The major averages finished the day on opposite sides of the unchanged line. While the Dow rose 56.66 points or 0.3 percent to 17,947.02, the Nasdaq slid 31.68 points or 0.6 percent to 5,080.51 and the S&P 500 edged down 0.70 points or less than a tenth of a percent to 2,101.61.

However, the major averages all moved lower for the week. The Nasdaq dropped by 0.7 percent, while the Dow and the S&P 500 both fell by 0.4 percent.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Monday. Japan's Nikkei 225 Index plunged by 2.9 percent, while Hong Kong's Hang Seng Index tumbled by 2.6 percent.

The major European markets are also seeing significant weakness on the day. While the U.K.'s FTSE 100 Index is down by 1.4 percent, the German DAX Index and the French CAC 40 Index are down by 2.8 percent and 3.1 percent, respectively.

In commodities trading, crude oil futures are sliding $0.71 to $58.92 a barrel after ending little changed at $59.63 a barrel in the week ended June 26th. Gold futures, which rallied $28.70 or 2.4 percent to $1,173.20 an ounce last week, are rising $4.10 to $1,177.30 an ounce.

Among currencies, the U.S. dollar advanced against most currencies last week. The buck climbed 0.9 percent against the yen before ending the week at 123.85 yen and jumped 1.6 percent against the euro to $1.1167. The dollar is currently trading at 122.82 yen and is valued at $1.1119 versus the euro.