Dow Jones Industrial Average Plunges 170 Points After Greece Misses Payment Deadline To International Monetary Fund

U.S. stocks traded sharply lower Thursday, with the Dow Jones Industrial Average tumbling nearly 200 points in afternoon trading, as Greece opted to delay a debt repayment to European creditors, sparking fears that Athens is edging closer to bankruptcy. All 10 sectors in the S&P 500 traded lower, led by declines in the materials, energy and technology sectors.

The Dow Jones Industrial Average (INDEXDJX:.DJI) dropped 169.69 points, or 0.94 percent, to close at 17,906.58. The Standard & Poor's 500 (INDEXNASDAQ:.IXIC) fell 18.18 points, or 0.86 percent, to 2,095.89. The Nasdaq composite (INDEXSP:.INX) lost 40.11 points, or 0.79 percent, to 5,05913.

The Greek government chose to delay a debt payment this week, originally due Friday. Greek officials instead decided Thursday, June 4, to bundle four installments due in June into a single 1.6 billion euro ($1.8 billion) lump sum. The deadline for repayment to the International Monetary Fund (IMF) is now due on June 30.

“Each time Greece approaches a deadline there are some sleepless nights because of the tense negotiations,” said Tim Dreiling, senior portfolio manager at the Private Client Reserve at U.S. Bank. “But right now it’s in the best interest of all parties to come to some agreement, and we expect Europe will find a way to make a deal work."

Separately, the IMF suggested Thursday the U.S. central bank should wait until the first half of next year before raising interest rates -- until there are signs of a pickup in wages and inflation, the group said in its annual review of the U.S. economy. There are "significant uncertainties as to the future resilience of economic growth," the IMF said.

The IMF also cut its U.S. growth forecast for this year to 2.5 percent from 3.1 percent in April after the economy shrank in the first three months of the year, contracting 0.7 percent, driven by a slowdown in shipping due to labor disputes at West Coast ports.

Data released ahead of the opening bell Thursday showed fewer Americans filed new claims for unemployment in the last week of May as initial claims fell 8,000 to a seasonally adjusted 276,000 for the week ending May 30, the U.S. Labor Department said Thursday. Economists had forecast jobless claims to fall by 3,000 to 279,000, according to analysts polled by Thomson Reuters.

Telecommunications company Verizon Communications Inc. (NYSE:VZ) led the Dow lower Thursday, dropping around 2 percent to $48.12, after JPMorgan Chase & Co. downgraded the company's shares to Neutral from Overweight, saying its acquisition of AOL may take a few years to materialize. The firm maintained its 12-month price target of $55.

Chemical company DuPont Co. (NYSE:DD) and aerospace giant Boeing Co. (NYSE:BA) also led the blue-chip index lower, both falling around 2 percent. The only company trading higher in the Dow in afternoon trading was Goldman Sachs Group Inc. (NYSE:GS), up just 0.3 percent.

The S&P 6500 materials sector lost more than 1 percent, led by a 3 percent decline from chemical company LyondellBasell Industries NV (NYSE:LYB). Meanwhile, the S&P 500 energy sector fell nearly 1 percent, driven by a nearly 4 percent loss from Chesapeake Energy Corporation (NYSE:CHK).

Western Digital Corp. (NASDAQ:WDC) dropped 2.8 percent, sending the S&P 500 information technology sector lower.