Wall Street On Back Foot As Greeks Opt For 'No' Vote

(RTTNews) - Early indications suggest that Wall Street stocks may open Monday's session notably lower, as the Greek crisis has aggravated following the decision by Greeks to say 'no' to the austerity measures proposed by its international creditors as pre-condition for the bailout financing. The 'no' vote in Sunday's referendum places Greece at the crossroads. A lack of resolution to the Greek debt crisis may worry traders to no end. The domestic markets, while focusing on the post-referendum discussions among various stakeholders in the crisis, may also stay tuned to a service sector reading due shortly after the markets open and pre-announcements if any, especially as the second quarter reporting season draws near.

At 6:15 am ET, the Dow futures are receding 109 points, while the S&P 500 futures are slumping 10.50 points and the Nasdaq 100 futures are declining 28.75 points.

U.S. stocks declined yet again in the holiday-shortened week ended July 2nd, as the Greek crisis took the center stage.

The results of service sectors surveys for June by the Institute for Supply Management and Markit, the FOMC minutes of June Monetary Policy Committee meeting, the weekly jobless claims data and a few Fed speeches are among the closely watched economic data of the unfolding week.

The Commerce Department's trade balance report and wholesale inventories report, both for May, the Federal Reserve's consumer credit report for May and the results of Treasury auctions of 3-year and 10-year notes and 30-year bonds round up the economic events/data of the week.

Markit is due to release its final service sector PMI data at 9:45 am ET. Economists expect the index to be upwardly revised to 55.1 from the flash estimate of 54.8, although down from 56.2 in May.

The Institute for Supply Management is scheduled to release the results of its service sector survey at 10 am ET. Economists expect the PMI to have risen to 56 in June from 55.7 in May.

In corporate news, Aetna (AET) and Humana (HUM) announced an agreement under which Aetna will acquire all outstanding shares of Humana for $37 billion or $230 per Humana share in cash and stock. The deal is expected to be close in the second half of 2016. Aetna expects the deal to be neutral to its operating earnings per share in 2016 but to add to operating earnings per share by mid-single digit percentage in 2017.

Amdocs (DOX) said it has completed the acquisition of a substantial majority of Comverse's business support system business unit assets for about $273 million in cash. Amdocs expects the deal to contribute revenues in the low tens of millions of dollars for the first couple of quarters after closing and be accretive to non-GAAP earnings per share after the first year after closing.

Whirlpool (WHR) announced the completion of its purchase of privately held American Dryer Corp.

The major Asian averages retreated steeply in reaction to the Greek referendum, while the Chinese market bucked the downtrend, thanks to measures announced by the Chinese stock market regulator over the weekend.

The rise in risk aversion boosted the safe haven yen, which served to weaken Japanese stocks. The Nikkei 225 average ended down 427.67 points or 2.08 percent at 20,112. A majority of stocks declined in the session. Australia's All Ordinaries languished below the unchanged line throughout the session before ending down 64.70 points or 1.17 percent at 5,463.

Hong Kong's Hang Seng Index ended at 25,236, down 827.83 points or 3.18 percent, while China's Shanghai Composite Index added 89.02 points or 2.41 percent before ending at 3,776.

On the economic front, preliminary estimates released by Japan's Cabinet Office showed that the leading economic indicators index for Japan edged down 0.2 points to 106.2 in May, in line with expectations. The coincident index slipped 1.8 points to 109.2, while the lagging index rose 0.6 points to 125.8.

European stocks opened lower and have been range bound at lower levels since then, as the Greeks opted to choose no to the reform proposals in the referendum held last Sunday.

Germany's Angela Merkel and France's Francois Hollande are set to meet in Paris to take stock of the fallout of the 'no vote' in the referendum. European Commission President Jean-Claude Juncker is scheduled to hold a teleconference with the European Central Bank President Mario Draghi and European Union's Jeroen Dijsselbloem later in the day. Donald Tusk, the president of the European Council confirmed that Eurozone nations will hold a summit on the results of the referendum on Tuesday. In a surprising move, Greek Finance Minister Yanis Varoufakis announced his resignation despite the referendum results coming in line with his call.

In corporate news, Rolls-Royce lowered its 2015 profit guidance, which calls for underlying profit before tax of 1.325 billion pounds to 1.475 billion pounds, citing deterioration in conditions offshore.

On the economic front, the results of a survey by Sentix showed that investor confidence unexpectedly improved in June. The corresponding index rose to 18.5 in July from 17.1 in June, while economists expected a reading of 16.

Meanwhile, data released by the German Federal Statistical Office showed that factory orders fell 0.2 percent month-over-month in May, reversing some of the 2.2 percent climb in April. Economists expected a 0.4 percent drop for the month. The results of a survey by Markit showed that the construction sector expanded at its weakest pace in 5 months in July. The construction sector PMI eased to 50.7 in June from 50.8 in May.