Stocks fell on Tuesday as investors worried about a report Greece wants to renegotiate a financial aid package and on the prospect of rising interest rates.
Greece's government, concerned that the International Monetary Fund could impose tough conditions in exchange for aid, wants to bypass an IMF financial contribution, senior government sources in Athens told Market News International. A Greek finance ministry source denied the report.
Most of the S&P 500's sectors fell, with the S&P information technology index <.GSPT>, dropping 0.7 percent.
The bond spreads in Greece relative to German bonds are at their widest level now since the introduction of the euro, said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York.
This shows the debt crisis has intensified there, and I think there is frustration that there is not more of an agreement about how to deal with Greece and concern that the solution is dragging out.
The Dow Jones industrial average <.DJI> dropped 27.21 points, or 0.25 percent, to 10,946.34. The Standard & Poor's 500 Index <.SPX> dropped 2.78 points, or 0.23 percent, to 1,184.66. The Nasdaq Composite Index <.IXIC> dropped 7.64 points, or 0.31 percent, to 2,421.89.
Signs of an improving U.S. economy have driven stocks higher, with the Dow index brushing up against 11,000. At the same time, Treasury debt prices have fallen, with benchmark yields climbing to touch 4 percent for the first time in 10 months, worrying some investors concerned about rising rates.
We had a tremendous jump in the 10-year yield last month, and that continues to hold up, said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois. That has implications here in the United States for the fragile real estate market.
Massey Energy Co
The Federal Reserve will release minutes from its March 16 policy setting meeting, at which the Federal Open Market Committee reiterated its intention to keep interest rates ultra low for an extended period. The committee will issue the minutes at around 2 p.m. (1800 GMT).
(Reporting by Edward Krudy; Editing by Padraic Cassidy)