Fear that Greece could default and abandon the euro is rattling global financial markets.
News that negotiations between Greece and its international lenders are making little progress sent European stock markets down sharply Friday, and the selling spread across the Atlantic. By the close of U.S. trading, stocks across industries were lower, with four of five stocks down. Investors shifted money into German government bonds, a perceived haven in troubled times.
In the U.S., disappointing first-quarter financial results from several big companies fed the selling. After American Express reported revenue that fell short of expectations, investors drove down its stock more than 4 percent.
“The day of reckoning” for Greece is fast approaching, said Uri Landesman, president of investment fund Platinum Partners. “People thought everyone would work it out, but if no one caves, there won’t be a deal.”
For all the turmoil in the markets, major U.S. stock indexes closed the day with relatively modest losses.
At one point, the Dow Jones industrial average was down 357, headed for its worst day in six months. The Dow regained some of those losses toward the close of trading, ending down 279.47 to 17,826.30, a drop of 1.5 percent.
That was the worst decline since March 25. The Dow has struggled since reaching a record high March 2 and is now back where it started the year.
The Standard & Poor’s 500 index fell 23.81, or 1.1 percent, to 2,081.18. The Nasdaq composite fell 75.98, or 1.5 percent, to 4,931.81.
Greece and its creditors are still struggling to find a deal that can keep the country from defaulting on its debt. The argument is over what reforms Greece should make in return for loans. Many think Greece will struggle to make payments to the International Monetary Fund due next month if it fails to reach a deal.
Worrisome news out of China also weighed on investors.
After markets closed in Asia, Chinese financial regulators issued warnings about that country’s soaring stock market. Regulators said they will tighten rules on borrowing to buy stocks. They also plan to make it easier for investors to bet against the market there, The Wall Street Journal reported. Shanghai’s stock market has more than doubled in the last year.