Stocks fell Monday after the euro zone ministers put off the decision for a new aid package for Greece and a possible downgrade of Italy's credit rating rekindled fears about the ongoing debt crisis, pushing investors out of riskier assets.
Stocks finished mixed Friday amid thin, choppy trading, with the Dow and S&P snapping a six-week losing streak. The Nasdaq declined, however, marking its fifth-consecutive down week.
Euro zone finance ministers postponed a decision on extending 12 billion euros($17 billion) in emergency loans to Greece, saying Athens would first have to introduce harsh austerity measures.
The ministers said they expected the money, the next tranche in a 110 billion euro bailout of Greece by the EU and the IMF, to be paid by mid-July. Greece has said it needs the loans by then to avoid defaulting on its debt.
Moody’s warned on Friday it could cut Italy’s sovereign credit rating, citing challenges ahead for economic growth for the country.
With no notable economic news due Monday, investors will remain focused on Greece and the threat of contagion to other highly indebted euro zone countries.
Major financials were trading lower after Citigroup cut its price targets on Bank of America , Goldman Sachs and Morgan Stanley .
Meanwhile, KBW raised its price target on Discover Financial to $30 from $26.
PNC Financial has reportedly agreed to buy the Royal Bank of Canada’s retail operations for $3.45 billion. PNC financial shares were slightly lower in pre-market trade.
Jim Albaugh, President and CEO of Boeing Commercial Airplanes told CNBC Boeing is evaluating options for its 777 range of airplanes, considering whether to upgrade the 777 or build a completely new model.
General Electric reached a tentative four-year agreement with trade unions over job packages.