NEW YORK - Stock markets around the world fell on Monday, suffering their first bout of significant contagion from the Greek crisis after 11th hour talks between the near bankrupt country and its creditors collapsed.
The losses were broad across risk assets. Major stock indexes fell sharply, as did crude oil prices, while the euro weakened against the dollar. Gold and silver rose on the day.
Talks on Sunday between Greece and its creditors - described as a last attempt to bridge their differences - broke up after less than an hour. European Union officials said Athens had offered no new concessions to secure the funding it needs, while Athens said it would not give in to demands for more pension and wage cuts. Greece must repay $1.8 billion to the International Monetary Fund by mid-year.
Greece has already been bailed out twice and many banks have cut their exposure to the country while euro zone authorities have put in place mechanisms to limit contagion. However, the prospect of default and the possibility of Athens leaving the euro weighed heavily on investor sentiment.
"It does look like a technical default is in sight at the end of the month and the market could see a significant pullback," said Peter Cardillo , chief market economist at Rockwell Global Capital in New York.
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The MSCI International ACWI Price Index fell 0.9 percent while the pan-European FTSEurofirst 300 lost 1.4 percent, pressured by losses in bank stocks. The Hang Seng index of top shares in Hong Kong fell 1.5 percent.
The Dow Jones industrial average fell 164.05 points, or 0.92 percent, to 17,734.79, the S&P 500 lost 16.38 points, or 0.78 percent, to 2,077.73 and the Nasdaq Composite dropped 50.20 points, or 0.99 percent, to 5,000.90.
The CBOE Volatility index , a measure of U.S. investor anxiety, rose 10.5 percent, while a gauge of European stock market volatility popped 10.7 percent and hit its highest since January.
The benchmark 10-year U.S. Treasury note rose 14/32 in price, pushing the yield down to 2.3307 percent.
In the currency market, the euro fell against the U.S. dollar, down 0.3 percent to $1.1240, recovering from a low of $1.1188. The U.S. dollar index, which measures the greenback against a basket of currencies, rose 0.15 percent. The yen moved less than 0.1 percent against the dollar.
Investors are also looking ahead to a meeting of the U.S. Federal Reserve, which will issue a statement after the two-day meeting ends on Wednesday. Strong U.S. data last week has reinforced expectations that the central bank is on track to raise rates, possibly as soon as September. Investors will focus on any changes in Fed Chair Janet Yellen 's language in a post-meeting news conference.
U.S. crude futures fell 0.9 percent to $59.46 per barrel while Brent lost 1.8 percent to $62.74. Gold rose 0.2 percent on the day while silver rose 0.8 percent. Copper sank 1.6 percent.
