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While you were sleeping: Last-ditch Greek aid request

While you were sleeping: Last-ditch Greek aid request

July 1 (BusinessDesk) - As Greece headed towards missing its June 30 deadline to repay about 1.5 billion euros to the International Monetary Fund, Prime Minister Alexis Tsipras requested a new two-year bailout.

Eurogroup ministers will discuss the fresh Greek proposal on a teleconference in Brussels as Greece’s current aid program is set to expire.

“Extraordinary Eurogroup teleconference tonight 19:00 Brussels time to discuss official request of Greek government received this afternoon,” Eurogroup President Jeroen Dijsselbloem said on his official Twitter feed.

However, German Chancellor Angela Merkel expressed her exasperation with Greece, rejecting Tsipras’s latest proposal outright, days after Tsipras unexpectedly called for this Sunday’s referendum on the conditions of the creditors’ final offer.

“We’ll negotiate about absolutely nothing before the planned referendum is held,” Merkel told reporters in Berlin.

Europe’s Stoxx 600 Index ended the session with a 1.3 percent slide from the previous close. That brought its quarterly drop to 4 percent, according to Bloomberg. Germany’s DAX fell 1.3 percent, the UK’s FTSE 100 Index declined 1.5 percent, and France’s CAC 40 Index retreated 1.6 percent.

"The market is just hinging on anything that comes out," Mark Kepner, managing director, sales and trading at Themis Trading in Chatham, New Jersey, told Reuters. "It all depends by the hour who says what.”

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Wall Street moved higher following the previous day’s plunge on the uncertainty surrounding a potential Greek default and exit from the euro.

In late trading in New York, the Dow Jones Industrial Average rose 0.29 percent, while the Standard & Poor’s 500 Index gained 0.50 percent, and the Nasdaq Composite Index added 0.71 percent. Even so, the key indices are set to end the month of June with losses.

“The returns we’ve all had in the past three to five years are in the rear-view mirror,” John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, told Bloomberg. “Things are pretty flat, which makes sense after 2013 and 2014. Our stocks are trading at 100 percent fair value.”

Advances in shares of Walt Disney and those of DuPont, each up 1 percent recently, led the gains in the Dow.

Meanwhile, the latest US economic data were upbeat. The Conference Board’s index of consumer attitudes strengthened with a better-than-expected reading of 101.4 in June, up from 94.6 in May. Separately, the S&P/Case Shiller composite index of 20 metropolitan areas rose 4.9 percent in April from a year ago, the latest sign that the US housing industry is finally turning a corner.

"The housing market has essentially recovered. In those areas where home prices moved too far out of line with underlying regional economic fundamentals, the price recovery is likely to continue to fall short," Steve Blitz, chief economist at ITG Investment Research in New York, told Reuters.

Federal Reserve Vice Chair Stanley Fischer pointed to the improvement in a speech in Oxford.

“The latest monthly data on real consumption provide welcome evidence that consumer demand is rebounding, and that economic activity likely expanded at an annual rate of about 2.5 percent in the second quarter,” Fischer said. “In addition, US labour markets have continued to improve.”

“There are grounds for optimism that economic growth will be sufficient to promote further gains in labour market conditions,” he said. “An important factor working to increase confidence in the inflation outlook will be continued improvement in the labour market.”

(BusinessDesk)

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