NEW YORK - The wait for an expected deal between Greece and its creditors rattled financial markets around the world Monday. Yields for ultrasafe U.S. government debt hit their lowest this year, the euro dropped against the dollar, and European stocks took a fall.
But U.S. stocks dropped only slightly. The Dow Jones Industrial Average fell 6.74 points, or 0.1 percent, to close at 12,653.72, for a drop of 0.1 percent. The Standard & Poor's 500 index fell 3.32 points, or 0.3 percent, to 1,313.01. The Nasdaq composite lost 4.61 points, or 0.2 percent, to 2,811.94.
Borrowing costs for European countries with the heaviest debt burdens shot higher. The two-year interest rate for Portugal's government debt jumped to 21 percent after trading around 14 percent last week. Greece and the investors who bought its government bonds were said to be close to an agreement over the weekend. A tentative deal would replace bonds held by investment funds and banks with new ones at half the face value.
The plan is aimed at cutting Greece's debt by roughly $132 billion. Greece needs it to secure a crucial installment of bailout loans and make an upcoming bond payment. But a deal has been in the works for weeks and could still fall apart.
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 1.85 percent. It was trading above 2 percent last Wednesday.
The yield on the five-year Treasury note hit a record low of 0.71 percent early Monday. It finished Monday at 0.74 percent, from 0.75 percent late Friday.