U.S. stocks drop, extending a recent decline

NEW YORK - U.S. stocks declined on Monday, extending a recent slump.

Airlines were among the biggest decliners as investors worried that expanding capacity could hurt their profits. American Airlines and United Continental each fell 5 percent.

Stocks have been falling over the last two weeks as traders try to anticipate when the Federal Reserve will begin raising interest rates from their historic lows.

European stocks were lower following several days of tense rhetoric between Greece and its creditors.

The Standard & Poor's 500 index dropped 12 points, or 0.6 percent, to 2,081 as of 2:19 p.m. ET. The Dow Jones industrial average fell 69 points, or 0.4 percent, to 17,780. The Nasdaq composite declined 51 points, or 1 percent, to 5,017.

Airline stocks were among the biggest decliners as industry executives met in Miami for the International Air Transportation group's annual general meeting.

American Airlines CEO Doug Parker told Reuters at the meeting Sunday that he was worried that growth in airline capacity could depress profits. The company's stock was among the leading decliners in the S&P 500, dropping $2.21, or 5.3 percent, to $39.51. Delta Air Lines and Southwest Airlines also fell.

The six-year bull market in stocks has paused for the past two weeks as investors try to assess if Fed policymakers will raise their benchmark interest rate for the first time since the recession. A stronger-than-forecast jobs report on Friday suggested that the economy is recovering from its winter slump.

Investors will be closely following this week's economic data to see if it shows the same strength as Friday's jobs report, said Quincy Krosby, a market strategist at Prudential Financial.

A private survey on small business optimism and a government report on job openings, both scheduled to be released Tuesday, will give investors more clues about how well the economy is doing.

"The market is suggesting that if the data continue at this pace, the Fed will be more inclined to raise rates in September, rather than waiting," said Krosby.

Talks between Greece and its creditors have been deadlocked since late last week, when Greek Prime Minister Alexis Tsipras rejected as unacceptable a proposal made by the three institutions overseeing the country's bailout: the European Central Bank, the International Monetary Fund and the European Commission.

A resolution to the talks is needed by June 30, when Greece's emergency financing program ends. Without fresh funds, Greece is unlikely to be able to repay its debts and could end up crashing out of the euro. Jitters over Greece's financial future have been a cloud over markets in recent days, notably in Germany, where the DAX index is down more than 10 percent from its April peak.

In Europe, Germany's DAX was down 1.2 percent while the CAC-40 in France declined 1.3 percent. The FTSE 100 index of leading British shares was 0.2 percent.

Deutsche Bank bucked the trend, surging 6 percent after the company said its co-CEOs, Anshu Jain and Juergen Fitschen, will step down early. Jain will depart at the end of this month while Fitschen will follow next May. They will be succeeded by British banker John Cryan. Cryan is currently a member of the company's supervisory board. Deutsche Bank's U.S.-listed shares gained $1.77 to $32.39.

Benchmark U.S. crude oil dropped $1.13 to $57.98 a barrel on the New York Mercantile Exchange following OPEC's decision to keep its oil output target on hold. Brent crude, a benchmark for international oil used by many U.S. refineries, fell 79 cents to $62.51 a barrel in London.

In U.S. government bond trading, prices rose. The yield on the 10-year note fell to 2.39 percent. The yield had risen to its highest level of the year on Friday. The dollar slipped to 125.14 yen from 125.61 yen on Friday. The euro strengthened to $1.1204 from $1.1113.

f

We and our partners use cookies to understand how you use our site, improve your experience and serve you personalized content and advertising. Read about how we use cookies in our cookie policy and how you can control them by clicking Manage Settings. By continuing to use this site, you accept these cookies.