Stocks May Give Back Ground Amid Worries About Greece - U.S. Commentary

(RTTNews) - After ending the previous session modestly higher, stocks are likely to move back to the downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 64 points.

Concerns about Greece's stalled negotiations with its international creditors may weigh on the markets in early trading following yesterday's news that the International Monetary Fund has halted bailout talks.

With a repayment deadline looming at the end of the month, the lack of progress in the talks has led to renewed worries about a possible default by Greece.

Jonathan Loynes, Chief European Economist at Capital Economics, said, "Greece's creditors have made it clear that the ball is firmly in its court to make the concessions needed to reach a last-minute agreement."

"But even if Greece finally blinks, the stop-gap deal that will probably result is unlikely to bring a permanent end to the crisis," he added.

Several officials told Reuters that the possibility of a Greek default has been formally discussed for the first time among senior European Union officials.

On the U.S. economic front, the Labor Department recently released a report showing that producer prices rose by slightly more than expected in May, with the price growth reflecting a substantial rebound in energy prices.

The Labor Department said its producer price index for final demand rose by 0.5 percent in May following a 0.4 percent drop in April. Economists had expected prices to increase by 0.4 percent.

Excluding food and energy prices, core producer prices inched up by 0.1 percent in May after falling by 0.2 percent in the previous month. The modest uptick in core prices matched economist estimates.

Not long after the open, the University of Michigan is due to release its preliminary report on consumer sentiment in the month of June.

Economists expect the consumer sentiment index to edge up to a reading of 91.2 in June from the final May reading of 90.7.

After showing a strong move to the upside in early trading on Thursday, stock gave back some ground as the day progressed but managed to close modestly higher. The slim gains came on the heels of Wednesday's rally, with the major averages further offsetting their recent pullback.

The major averages ended the day in positive territory but well off their highs for the session. The Dow edged up 38.97 points or 0.2 percent to 18,039.37, the Nasdaq inched up 5.82 points or 0.1 percent at 5,082.51 and the S&P 500 crept up 3.66 points or 0.2 percent to 2,108.86.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Australia's All Ordinaries Index dipped by 0.2 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.6 percent, the German DAX Index and the French CAC 40 Index are down by 1.1 percent and 1.3 percent, respectively.

In commodities trading, crude oil futures are sliding $0.53 to $60.24 a barrel after falling $0.66 to $60.77 a barrel on Thursday. An ounce of gold is currently trading at $1,177.50, down $2.90 from the previous session's close of $1,180.40. On Thursday, gold fell $6.20.

On the currency front, the U.S. dollar is trading at 123.66 yen compared to the 123.42 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1230 compared to yesterday's $1.1258.