By Sara Sjolin, MarketWatch
Greeks reject terms of bailout package
U.S. stocks were poised to open sharply lower on Monday, with
futures in the red after Greeks on Sunday overwhelmingly rejected
the terms of a rescue package proposed by its international
lenders.
Futures for the Dow Jones Industrial Average lost 128 points, or
0.7%, to 17,521, while those for the S&P 500 index fell 13.30
points, or 0.6%, to 2,055.50. Futures for the Nasdaq-100 index slid
35.50 points, or 0.8%, to 4,393.25.
The declines tracked losses on the European stock markets
(http://www.marketwatch.com/story/european-stocks-knocked-down-as-greek-voters-say-no-to-creditors-demands-2015-07-06),
where the Stoxx Europe 600 index erased 1% to 379.70 and Germany's
DAX 30 index tumbled 1.4% to 10,907.35. Asian shares also mostly
slumped
(http://www.marketwatch.com/story/china-shares-rise-after-beijings-weekend-rescue-2015-07-05).
Greece's rejection of austerity: The global selloff came after
more than 61% of Greeks voted "no"
(http://www.marketwatch.com/story/in-rebuke-to-europe-greeks-vote-resounding-no-to-bailout-terms-2015-07-05)
in Sunday's referendum on austerity measures put forward by the
International Monetary Fund and the eurozone as terms for further
bailout aid. The Alexis Tsipras-led government will now try to
renegotiate a new bailout package with the lenders, but economists
fear the lenders are unwilling to accept looser reforms, raising
concerns that Greece will exit the euro. Read: Greek debt crisis:
Brace for possible return to the drachma, say analysts
(http://www.marketwatch.com/story/greek-debt-crisis-brace-for-possible-return-to-the-drachma-say-analysts-2015-07-06)
"The outcome of the Greek referendum has significantly increased
the risk of Greece leaving the eurozone, which is now by far the
most likely outcome," said Erik Nielsen, global chief economist at
UniCredit, in a note. "The process may start within days or weeks,
but it won't be a smooth ride into a new currency. It'll be chaos
with political ramifications."
The euro also was hit hard by the developments
(http://www.marketwatch.com/story/euro-falls-against-rivals-as-greek-voters-reject-austerity-demands-2015-07-06)
in Greece, changing hands at $1.1032, down from $1.1115 late Friday
in New York. The shared currency traded as low as $1.0952 earlier
on Monday, according to FactSet.
Greece's stock market, the Athex Composite , remained closed
after being shut last week. The country's banks also stayed closed.
The Global X FTSE Greece 20 ETF (GREK) was still open for trade,
however, tumbling 10% ahead of the bell.
U.S. data: On a light day for data, the only major release is
the ISM nonmanufacturing index due at 10 a.m. Eastern Time.
Economists polled by MarketWatch expect a reading of 55% for June,
down from 55.7% in May
(http://www.marketwatch.com/story/ism-services-index-comes-in-below-forecast-for-may-at-557-2015-06-03).
Investors are closely watching data coming out of the U.S. in
trying to gauge when the Federal Reserve will hike interest rates.
The top-tier nonfarm payrolls report out on Thursday missed analyst
expectations
(http://www.marketwatch.com/story/us-adds-223000-jobs-in-june-as-unemployment-falls-to-7-year-low-2015-07-02),
although it showed unemployment fell to a seven-year low. U.S.
stocks were closed for Independence Day on Friday and ended
Thursday
(http://www.marketwatch.com/story/us-stock-futures-steady-ahead-of-june-jobs-report-2015-07-02)
with a second straight week of losses as investors grappled with
uncertainty over Greece.
There were no Fed speakers on tap for Monday.
Corporates: A. Schulman Inc. (SHLM) is expected is report fiscal
third-quarter earnings of 77 cents a share on revenue of $605.2
million, according to analysts surveyed by FactSet.
Shares of Aetna Inc. (AET) skidded 3.5% in premarket trade after
the health insurer on Friday said it would buy Humana Inc
(http://www.marketwatch.com/story/aetna-to-buy-humana-in-37-billion-merger-deal-2015-07-03).(HUM)
for $37 billion, after weeks of merger talks. Humana shares jumped
7.7% in Monday's premarket action.
Shares in Dollar Tree Inc. (DLTR) are expected to see active
trade after the retailer said late Thursday it received Federal
Trade Commission clearance
(http://www.marketwatch.com/story/dollar-tree-family-dollar-deal-gets-ftc-approval-2015-07-02-161033944)
to buy Family Dollar Stores Inc. (FDO)
Tesla Motors Inc. (TSLA) inched 0.6% higher ahead of bell,
taking it a step closer to its all-time high of $291.42, set on
Sept. 4. Short-interest in the stock is 19.4% of shares
outstanding.
Other markets: Crude oil plunged 3.3% to $55.07 a barrel, while
gold inched 0.1% higher to $1.164.60 an ounce.
The dollar traded mostly higher against other major currencies,
with the ICE dollar index up 0.4% at 96.46.
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