U.S. stocks fell with European equities, while Treasuries and German bunds rose as ongoing deadlock between Greece and its creditors spurred investors to reverse recent trades. Crude oil and gold slid.
The Standard & Poor’s 500 Index lost 0.7 percent by 4 p.m. in New York, snapping a two-day climb. The Stoxx Europe 600 Index slid 0.4 percent following its best four-day rally since January. The euro rallied after its biggest drop in three months. Yields on 10-year Treasuries fell four basis points to 2.37 percent, and German bund rates slipped to 0.84 percent. U.S. oil dropped 1.2 percent, while gold sank a fourth day.
Greek Prime Minister Alexis Tsipras is holding talks into the night after a first round of negotiations with euro-area finance chiefs adjourned without a breakthrough on bailout assistance. Germany downplayed the chances of an imminent deal after Greece rejected the latest set of terms from creditors, damping optimism that the crisis will be resolved by the end of this week. The U.S. economy shrank less than was previously reported in the first quarter, data released Wednesday showed.
“We’ve had a pretty good run in anticipation of a reasonable agreement,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates Inc. in Bethlehem, Pennsylvania. “Investors got a little more confident and pushed the market higher. This could be a pullback on that uncertainty finding its way back into the market.”
The downbeat tone from Berlin reinforced the brinkmanship at play, with finance ministers set to convene again Thursday. Greece faces a June 30 deadline to repay about 1.5 billion euros ($1.7 billion) to the International Monetary Fund.
In the U.S., materials producers fell 1.3 percent to lead losses among the S&P 500’s 10 main industry groups. Monsanto Co. dropped 5.7 percent on plans to cut costs amid low crop prices. Sysco Corp. rose 3.1 percent after a judge blocked its takeover of US Foods Inc. Lennar Corp. jumped 4.2 percent to lead homebuilders higher as quarterly earnings beat estimates.
A bigger gain in consumer spending helped the world’s largest economy contract less than previously estimated last quarter, with U.S. gross domestic product shrinking at a 0.2 percent annualized rate, compared with an earlier projection for a 0.7 percent drop. The Federal Reserve indicated last week that it would take a gradual approach to raising interest rates amid concern the economy’s recovery is uneven.
Back in Europe, Greece’s ASE Index snapped a four-day winning streak, falling 1.8 percent, the biggest drop among western-European markets. Portugal’s PSI 20 Index slid 1.3 percent, for the second-worst performance.
Spain’s 10-year bond yields rose one basis point, or 0.01 percentage point, to 2.11 percent, after falling 16 basis points on Monday, their steepest decline since June 2014. Rates on similar-maturity Italian bonds declined one basis point to 2.13 percent.
“There’s a lot of nervousness,” said Jan von Gerich, chief strategist at Nordea Bank AB in Helsinki. “Everyone is following what happens in Greece. We had quite a strong reaction pricing in an agreement, and now that it doesn’t seem that clear we’re going in the other direction.”
The Stoxx 600 fell as much as 0.7 percent before paring declines. Among stocks moving on corporate news, Delhaize Group slid 7.7 percent after agreeing to an all-share takeover offer from Royal Ahold NV. Bouygues SA tumbled 9.3 percent after rejecting billionaire Patrick Drahi’s bid for its telecommunications unit.
Emerging-market stocks climbed 0.3 percent to a three-week high as China moved to boost credit expansion, the latest measure aimed at reviving growth in the world’s second-largest economy. The Bloomberg Dollar Spot Index, a gauge of the greenback versus 10 major peers, added 0.1 percent in a fourth rising day.
Among commodities, West Texas Intermediate crude for August delivery slid 1.2 percent to $60.27 a barrel, after U.S. government data showed supplies of distillate, including heating oil and diesel, gained for a fifth week, while gasoline stockpiles rose for a second. Oil inventories fell an eighth week, the longest stretch of declines since early 2008.
Gold futures fell 0.3 percent to $1,172.90 an ounce, capping their longest slump in four weeks after the GDP report. The metal has slumped this week as the odds of a Fed rate increase increased amid some better-than-expected economic data.