US stocks decline amid Greek debt standoff, factory data miss

A woman walking past Bank of Greece headquarters in central Athens on June 15, 2015. US stocks retreated, with the Standard & Poor's 500 Index slipping below its average price during the past 100 days, after weekend negotiations between Greece an
A woman walking past Bank of Greece headquarters in central Athens on June 15, 2015. US stocks retreated, with the Standard & Poor's 500 Index slipping below its average price during the past 100 days, after weekend negotiations between Greece and its creditors broke down and factory data were weaker than forecast. -- PHOTO: AFP

WASHINGTON (BLOOMBERG) - U.S. stocks retreated, with the Standard & Poor's 500 Index slipping below its average price during the past 100 days, after weekend negotiations between Greece and its creditors broke down and factory data were weaker than forecast.

Industrial shares led declines as United Technologies Corp. dropped 2.5 per cent after lowering its 2015 profit target amid weakness at the Sikorsky helicopter unit being targeted for divestiture. Micron Technology Inc. lost 3.5 per cent after an analyst downgrade. Microsoft Corp. fell 1.1 per cent, down for a third day. Cigna Corp. jumped 12 per cent after a report that it was a takeover target.

The S&P 500 slid 0.5 per cent to 2,084.43 at 4 p.m. in New York, after earlier losing as much as 1 per cent. The Dow Jones Industrial Average fell 107.67 points, or 0.6 per cent, to 17,791.17, and the Nasdaq Composite Index dropped 0.4 per cent. About 5.9 billion shares changed hands on U.S. exchanges Monday, 7.6 per cent below the three-month average.

"All eyes are on the tumultuous Greek negotiations which have moved the risk markets not only here in the United States, but across the globe," said Chad Morganlander, a money manager in Florham Park, New Jersey, for Stifel, Nicolaus & Co., which oversees about US$170 billion (S$228 billion). "That as well as the weekly thematic will be the message from central banks, in particular the Federal Reserve."

The latest round of bailout talks between Greece and its creditors ended in acrimony after leaders met for just 45 minutes in Brussels on Sunday. European policy makers raised pressure on Greece to return to the negotiating table and make further concessions to unlock aid, as each side laid out its demands to rally support for its respective position.

The Federal Reserve begins a two-day meeting Tuesday, at which officials are expected to leave interest rates unchanged. Improving economic reports since the central bank's last session have pushed the probability for a September increase to 53 per cent, data compiled by Bloomberg show. Chair Janet Yellen may provide further clues at a press conference on June 17.

Manufacturing data today showed improvement from early year weakness remains uneven. Factory production unexpectedly declined in May as the slump in energy output deepened. The sluggish data signal that a stronger dollar and decrease in fuel prices are still holding back American factories. An earlier report showed manufacturing activity in the New York region unexpectedly worsened this month amid a drop in new orders.

Another report showed confidence among homebuilders rebounded in June to a nine-month high as warmer weather and a brighter economic outlook drew prospective buyers back to the market.