Worries About Greece Lead To Early Weakness On Wall Street - U.S. Commentary

(RTTNews) - Stocks have moved mostly lower in early trading on Friday, giving back some ground on the heels of the strength seen in the two previous sessions. The major averages have slid firmly into negative territory but remain well off Tuesday's lows.

The major averages have seen some further downside in recent trading, falling to new lows for the young session. The Dow is down 146.80 points or 0.8 percent at 17,892.57, the Nasdaq is down 35.69 points or 0.7 percent at 5,046.82 and the S&P 500 is down 15.54 points or 0.7 percent at 2,093.32.

Concerns about Greece's stalled negotiations with its international creditors are contributing to the early weakness on Wall Street following yesterday's news that the International Monetary Fund has halted bailout talks.

With a repayment deadline looming at the end of the month, the lack of progress in the talks has led to renewed worries about a possible default by Greece.

Jonathan Loynes, Chief European Economist at Capital Economics, said, "Greece's creditors have made it clear that the ball is firmly in its court to make the concessions needed to reach a last-minute agreement."

"But even if Greece finally blinks, the stop-gap deal that will probably result is unlikely to bring a permanent end to the crisis," he added.

Several officials told Reuters that the possibility of a Greek default has been formally discussed for the first time among senior European Union officials.

Meanwhile, traders have largely shrugged off the latest batch of U.S. economic data, including a report from the University of Michigan showing a much bigger than expected improvement in consumer sentiment in June.

The report said the preliminary reading on the consumer sentiment index for June came in at 94.6 compared to the final may reading of 90.7. Economists had expected the index to show a much more modest increase to 91.2.

Before the start of trading, the Labor Department released a separate report showing that producer prices rose by more than expected in May due to a substantial rebound in energy prices.

Biotechnology stocks have shown a significant move to the downside in early trading, dragging the NYSE Arca Biotechnology Index down by 1.8 percent.

Agios Pharmaceuticals (AGIO) is leading the biotech sector lower, tumbling by 13.8 percent despite reporting an impressive response rate for its leukemia treatment.

Steel, energy, and pharmaceutical stocks are also seeing considerable weakness, while airline stocks are bucking the downtrend.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Australia's All Ordinaries Index dipped by 0.2 percent.

Meanwhile, the major European markets have all come under pressure on the day. While the U.K.'s FTSE 100 Index has fallen by 0.9 percent, the German DAX Index and the French CAC 40 Index are down by 1.8 percent and 2 percent, respectively.

In the bond market, treasuries are seeing continued strength following the substantial rebound seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.2 basis points at 2.361 percent.