NYT: Wall Street Stocks Drag on Greece Talks

 

Stocks fell on Wall Street on Monday as talks dragged on in Greece over a fresh austerity package that is required if the debt-ridden country is to get a crucial bailout package.

In afternoon trading, the Standard & Poor’s 500-stock index declined 0.2 percent, and the Dow Jones industrial average lost 0.3 percent. The Nasdaq composite index shed 0.2 percent.

The declines followed a big gain Friday on the heels of surprisingly good employment figures in the United States.

In Europe, the leaders of the parties backing Greece’s coalition government were holding a second day of emergency talks over austerity measures that creditors are demanding in return for more money.

Fears that a deal won’t emerge have reinforced concerns of a disorderly Greek debt default that could send shock waves through the global economy. Prime Minister Lucas Papademos was to meet with negotiators from the euro zone and the International Monetary Fund and then with the leaders of the three political parties backing his coalition.

The parties all publicly oppose steep cuts in private sector pay demanded by the euro zone and monetary fund, but their backing is needed for the government to reach a deal for the bailout, which must be approved by the Greek Parliament. The new 130 billion euro ($171 billion) bailout deal is vital for Greece to avoid bankruptcy next month, because it cannot cover a 14.5 billion euro bond repayment due March 20 without the rescue funds.

The bailout’s implementation also depends on Greece’s progress in separate talks with banks and other private bondholders to forgive 100 billion euros in Greek debt, in exchange for a cash payment and new bonds with more lenient repayment terms.

In Europe, the FTSE 100 index of leading British shares closed down 0.2 percent, while the DAX in Germany was unchanged. The CAC 40 in France was 0.7 percent lower.

The euro, which was under pressure as investors awaited developments in Athens, shed losses through the day. The currency was trading 0.2 percent higher at $1.3133.

Oil prices tracked the broader market trends, with benchmark oil for March delivery down 66 cents at $97.18 a barrel on the New York Mercantile Exchange.

Earlier, Asian shares mostly traded higher as investors there had their first chance to respond to the advance generated by Friday’s upbeat jobs data.

The Nikkei 225 index in Japan rose 1.1 percent to its highest closing in more than three months, but the Hang Seng in Hong Kong lost 0.2 percent. Benchmarks in Singapore and mainland China also rose.

(Sources: NYT, AP)