While you were sleeping: Greece deal on shakier ground

Wall Street moved lower with European equities as the posturing between Greece and its international creditors continued, overshadowing a report showing the US economy did not contract as much in the first quarter as previously reported.

Key euro-zone officials told reporters that agreement on a deal has yet to be reached. Cash-strapped Greece faces a June 30 deadline to make a debt repayment to the International Monetary Fund.

"Our impression is that there's still a long way to go," German Finance Ministry spokesman Martin Jaeger told reporters in Berlin, Bloomberg reported. Creditor institutions have made "exceptionally generous" concessions to the Greek government, and "it's now up to the Greek side to show some movement," he says.

"There is still a lot of work to do," Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem told reporters in Brussels. "We are not there yet."

Europe's Stoxx 600 Index ended the session with a 0.4% drop from the previous close, while Greece's ASE Index fell 1.8%. France's CAC 40 Index declined 0.2%, while Germany's DAX slid 0.6%.

The UK's FTSE 100 Index advanced 0.2%.

"The optimism we had about getting close to a deal has faded. That doesn't mean we won't get one, but insiders seem less confident than they were a few days ago," Phil Orlando, chief equity market strategist at New York'sFederated Investors, told Reuters.

"If Greece defaults, the economic impact on the US will be relatively minor, but the headline risk will be significant and could lead to a drop of 5% or even 10%," Orlando says.

Meanwhile, a report shows German business confidence has suffered. The Ifo institute's business climate index fell more than expected, declining to 107.4 in June from 108.5 in May.

In the US, a Commerce Department report shows gross domestic product slid at a 0.2% annual rate in the first quarter. That's less than last month's estimate for a 0.7% contraction. Solid consumer spending helped buoy the outlook.

"These revisions have a marginally positive impact on our view of the second quarter," Nariman Behravesh, chief economist at IHS in Lexington, Massachusetts, told Reuters. "Demand is still solid, but the adjustment to the strong dollar has not run its course."

In late trading in New York, the Dow Jones Industrial Average fell 0.84%, while the Standard & Poor's 500 Index slid 0.56%, and the Nasdaq Composite Index declined 0.58%. Earlier in the session, the Nasdaq climbed to a record 5,164.36.

Slides in shares of DuPont and those of UnitedHealth, down 3.2% and 2.4% respectively, led the Dow lower.

Oil weakened. A government report shows US crude oil inventories fell last week, but gasoline stockpiles unexpectedly surged.

The importance of US oil output was confirmed by the Organisation of Petroleum Exporting Countries, which noted in an annual statistical bulletin that the group's share of the global market slipped to 41.8% in 2014, the lowest since 2003.

(BusinessDesk)