US open: Dow plunges 170 points on lukewarm data and Greece woes

US stocks plunged early on Monday, as investors digested a number of disappointing economic data, while European stocks were led lower by worries over Greece.

Just after 1500 BST, the Dow Jones Industrial Average was down 169 points, while the S&P 500 and the Nasdaq fell 19 and 51 points respectively.

Empire State Index falls

According to figures released by the Federal Reserve, output slid a 0.2% seasonally adjusted in May, falling short of expectations calling for a 0.2% expansion.

Production for April was revised downward to show a 0.5% drop, compared with an initial reading suggesting a 0.2% decline.

"Manufacturers will continue to struggle with the impact of the dollar’s rise for some time yet," said analysts at Capital Economics.

"With the non-manufacturing sectors all showing signs of a sharp pick-up in growth over the past couple of months, there is every reason to believe that GDP growth will average between 2.5% to 3.0% annualized over the rest of this month."

The New York Fed´s regional manufacturing sector index dropped to a reading of -1.98, its weakest level since January 2013, falling short of expectations calling for a 5.0 reading and down from May´s level of 3.1.

Analysts at Barclays said the weaker-than-expected print for the index in June implied "further headwinds for regional manufacturing", adding Thursday’s release of the Philadelphia Fed index could offer more clarity on the trend.

Housebuilders confidence rose to a nine-month high in June, according to figures released on Monday.

Figures released by National Association of Home Builders/Wells Fargo showed the widely-closed gauge rose five points to 59 in June, exceeding expectations for a reading of 55.

Greece woes intensify

European stocks fell on Monday, with Greece’s Athens Composite tumbling over 5%, while German government bond prices rose, as worries about Greece intensified after talks between Athens and its creditors broke down over the weekend.

“Stock markets however would still rather see a deal, even if it were only to postpone the inevitable,” said Chris Beauchamp, senior market analyst at IG.

“If the Greek government is planning to leave the Eurozone, they had better make sure that they approach it in a more thorough fashion than they have shown in negotiations over the past five years.”

Despite the impasse surrounding Greece, the euro was stable against the dollar, although the greenback gained 0.27% against the pound was flat against the yen, while gold futures rose 0.14% to $1,180.90.

Oil prices fell, with West Texas Intermediate losing 0.93% to $59.41 a barrel, while Brent fell 2.08% to $62.57 a barrel.

In company news, housebuilder Standard Pacific Corp gained 5.86% after announcing a $5.2bn merger deal with sector peer Ryland Group, whose shares rose 6.33%.

Alibaba climbed 0.25% after unveiling plans to launch a pay-to-watch video subscription service called Tmall Box Office in two months.