Wall St dips as uncertainty grows

A trader works on the floor of the New York Stock Exchange. File photo / AP

Wall Street moved lower alongside European equities amid increasing concern about a standoff between Greece and its international creditors.

"The word to describe the situation would be fear," John Plassard, vice president at Mirabaud Securities in Geneva, told Bloomberg Business. Prime Minister Alexis "Tsipras announced Greece would not accept an extension of the financial-assistance programme. This raises concerns of tensions and fears for the worst for Greek banks and European banks."

The Stoxx Europe 600 Index finished the day with a 0.7 per cent drop from the previous close. The UK's FTSE 100 Index slipped 0.2 per cent, France's CAC 40 Index declined 0.9 per cent, while Germany's DAX Index slumped 1.7 per cent.

It seems like Greece is separating itself more and more from the euro zone, and I think they're really causing problems there.

Phil Streible,senior market strategist at RJO Futures

The DAX was dragged down about increasing worries about the situation in the Ukraine, as Russia is a key market for Germany. In addition, JPMorgan downgraded the DAX to "neutral" in the wake of its recent advance.

Greece's Athens Stock Exchange General Index sank 4.8 per cent, as Tsipras remained adamant that he will roll back several austerity conditions of the nation's international bailout in his latest speech on Sunday.

"The possibility of Greece leaving the euro zone has increased with this speech from 35 per cent to 50 per cent," Gary Jenkins, chief credit strategist at LNG Capital, told Reuters.

Gold enjoyed a boost from the euro-zone worries. Gold futures for April delivery added 0.4 per cent to US$1,239 an ounce on the Comex in New York.

"It seems like Greece is separating itself more and more from the euro zone, and I think they're really causing problems there," Phil Streible, a senior market strategist at RJO Futures in Chicago, told Bloomberg. "You might be seeing people diversify out of euro currency and repositioning into the gold market."

Greek investors have increased their purchases of gold coins, according to an executive at the UK's Royal Mint, Bloomberg reported.

The euro-zone's uncertainty weighed on Wall Street. In afternoon trading in New York, the Dow Jones Industrial Average fell 0.29 per cent, while the Standard & Poor's 500 Index slipped 0.09 per cent. The Nasdaq Composite Index eked out a 0.02 per cent gain.

In the Dow slides in shares of Travelers and those of McDonald's, last 1.3 per cent and 1.1 per cent weaker respectively, outweighed gains in shares of Caterpillar and those of Chevron, up 1.9 per cent and 1.3 per cent respectively.

McDonald's fell after the company reported a bigger-than-expected drop in January sales.

The latest round of US corporate quarterly earnings has by and large surpassed expectations. Thomson Reuters data through Monday morning shows 72.6 per cent of the 328 companies in the S&P 500 that have reported earnings exceeded estimates.

Oil advanced after the Organization of Petroleum Exporting Countries reduced forecasts for global oil-supply growth in 2015. Opec also upgraded its forecast for demand for its oil this year.

Citigroup though issued a fresh warning on the outlook for oil, saying the recent rally may prove to be a "head fake" and that it foresees oil plunging to as low as US$20 a barrel.