US stocks drop on Greece default fears

New York - US stocks dropped on Monday as worry about a Greek debt default more than offset a positive reaction to big deals in the pharmaceuticals and homebuilder sectors.

At the closing bell, the Dow Jones Industrial Average was at 17 793.94, down 104.90 points (0.59%).

The broad-based S&P 500 fell 9.47 (0.45) to 2 084.64, while the tech-rich Nasdaq Composite Index fell 21.13 (0.42%) to 5 029.97.

European stocks fell sharply after weekend talks between Greece and creditors collapsed. US stocks were in the red all day as well, although the S&P 500 finished well above its session low of 2 072.49.

Homebuilders Ryland Group and Standard Pacific surged on news they are combining to create a company with a market capitalization of $5.2bn and an enterprise value of $8.2bn.

Target rose 1.2% on news it will sell its pharmacy and clinic business for about $1.9bn to CVS Health. CVS Health will acquire more than 1 660 pharmacies operating inside Target stores and will expand its MinuteClinic chain in Target as well. CVS Health gained 0.4%.