World shares dip as Greek talks continue

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

Equities moved lower overnight as investors remained focused on an outcome of Greek efforts to renegotiate the deals of its bailout which puts the euro at risk.

The Stoxx Europe 600 Index ended the day with a 0.2 per cent decline from the previous close as Greece and its international creditors have yet to produce an agreement about the nation's efforts to renegotiate the terms of its bailout. Greek Finance Minister Yanis Varoufakis began talks with euro zone finance ministers on Wednesday.

Germany's DAX Index ended the session little changed from the previous close. The FTSE 100 Index slid 0.2 per cent, while France's CAC 40 Index fell 0.4 per cent. Greece's Athens Stock Exchange General Index dropped 4 per cent.

"At the moment, it's still about the Greek story," Benno Galliker, a trader at Luzerner Kantonalbank in Lucerne, Switzerland, told Bloomberg. "There will likely be some compromise but investors are waiting until there's a solution. There are still risks out there for equity investors, but they should be buying on the dips."

The euro weakened against the US dollar, last trading at US$1.1294. Even so, Ladbrokes, a London-based gaming company, gives Greece odds of 8/11 of staying in the currency regime this year. Another betting house, William Hill, puts those odds at 1/4, according to Bloomberg.

"We all know what the big problem is-if the Greeks exit, so can others and that would throw this whole EU thing into disarray," Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, told Reuters.

In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.56 per cent, while the Standard & Poor's 500 Index slid 0.21 per cent. The Nasdaq Composite Index added 0.16 per cent.

Slides in shares of DuPont and those of Coca-Cola, down 1.2 per cent and 1.1 per cent respectively, led the Dow lower.

Shares of Pier 1 Imports sank, last 23.2 per cent weaker, after the company downgraded its full-year forecast.

On a positive note, shares of PepsiCo gained, last up 2.1 per cent, after the company reported fourth-quarter that exceeded expectations.

Of the more than two-thirds of S&P500 members that have reported results so far, 77 per cent have beaten profit estimates and 56 per cent surpassed sales projections, data compiled by Bloomberg showed.

Shares of Apple rose 1.5 per cent after the company said it will buy about US$850 million of power from a First Solar plant in California to lower its energy costs. Shares of First Solar gained 1.2 per cent.

Fresh takeover activity boosted shares Rite Aid, last up 9.2 per cent, after it agreed to buy EnvisionRX for about US$2 billion.

A report by the National Association of Realtors showed that the median existing single-family home price increased in 86 per cent of the 175 measured markets in the fourth quarter compared with the same quarter of 2013. Twenty-four areas, or 14 per cent, recorded lower median prices from a year earlier.

"Home prices in metro areas throughout the country continue to show solid price growth, up 25 per cent over the past three years on average," Lawrence Yun, NAR chief economist, said in a statement. "This is good news for current homeowners but remains a challenge for buyers who are seeing home prices continue to outpace their wages."

"Low interest rates helped preserve affordability last quarter, but it'll take stronger income gains and more housing supply to help meet the pent-up demand for buying," according to Yun.