U.S. stocks added to a global selloff on Monday as markets digested news of capital controls in Greece and the country veered toward a default on its debt, while the euro recouped some of its earlier losses against the dollar.
Talks between Athens and its creditors broke down over the weekend after Prime Minister Alexis Tsipras called a surprise referendum on the austerity cuts in the aid package proposed by Greece’s creditors. Tsipras late Sunday announced moves to prevent a collapse of the banking system.
After an initial wave of selling, European stocks and the euro recovered some ground as investors judged that the Greek crisis still had some way to run. On Wall Street, benchmark S&P 500 futures fell as much as 2 percent late on Sunday, but the index fell less than 1 percent in early Monday trading.
The CBOE Volatility index, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, jumped as much as 19.1 percent to 16.7 points, the highest in three months. It was last up 13.7 percent at 15.94, not far from its historic average.