NEW YORK – Stocks dropped and yields for ultra-safe U.S. government debt fell to their lowest level this year Monday while financial markets around the world waited for Greece to nail down a deal to reduce its crushing debt.
Greece and the investors who bought its national bonds were close to a deal over the weekend. The investors would swap their bonds for replacements with half the face value.
Greece needs the deal to secure a crucial installment of bailout loans and avoid missing an upcoming bond payment. But the deal has been in the works for weeks and could still fall apart.
The Dow Jones industrial average was down 72 points to 12,588 as of just before 1 p.m. EST, a drop of 0.6 percent. Financial stocks were the worst performers in the broader market, with Bank of America down 3.3 percent.
Borrowing costs for European countries with the largest debt burdens shot higher. The two-year interest rate for Portugal’s government debt jumped to 21 percent from 14 percent last week.
U.S. Treasury yields sank to their lowest level this year as traders parked cash in the safest assets. The yield on the 10-year Treasury sank to 1.83 percent. It was trading above 2
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