By Josie Cox and Tommy Stubbington
European stocks fell Tuesday as investors sought safer assets while eurozone decision makers met for what could be a final effort to keep Greece in the currency union.
The Stoxx Europe 600 was down 0.4% in the European afternoon, following Monday's declines. In the U.S., the S&P 500 was down 0.2% in early trade.
Greece submitted the same proposals that couldn't be discussed at an earlier date to the meeting of eurozone finance ministers in Brussels on Tuesday, according to a senior Greek government official.
The euro was 1.0% lower against the dollar at $1.0946.
"There is a slow realization that we will have to consider the implications of Greece exiting the monetary union. Today we're one day closer to that potentially being the case," said Hamish Pepper, a currencies strategist at Barclays.
"People are choosing the U.S. dollar as their preferred safe haven to go to in this time of uncertainty over Greece," he said.
Bond markets showed signs of stress. German debt, seen as a haven by investors, climbed. The yield on Germany's 10-year benchmark bond fell 0.1 of a percentage point to 0.67%, the lowest in more than a month. Yields fall as bond prices rise.
"The next few days will provide a clearer picture as to how this Greek drama will unfold, but we reiterate the fact that volatility will remain extremely high and news dependent," said Giordano Lombardo, chief executive and group chief investment officer of Pioneer Investments.
"We suggest maintaining a cautious posture across all asset classes," he said.
Ahead of a summit of leaders, eurozone finance ministers said it was up to Greece to present credible new proposals after the country's voters rejected austerity measures demanded by creditors.
Without a fresh inflow of funds, Athens will be unable to make a EUR3.5 billion ($3.9 billion) bond repayment to the European Central Bank on July 20.
The head of Greece's banking association said banks would remain closed through Wednesday. They were closed all of last week, as was the country's main stock exchange. The Athens bourse will remain closed Tuesday and Wednesday as well.
In commodity markets Brent crude was 0.8% lower at $56.14 a barrel. On Monday, oil prices recorded their biggest single-day declines in more than three months, as gyrations in Chinese stocks and the prospect of more crude from the U.S. and Iran revived worries about the global supply glut.
Gold was 1.4% lower on the day at $1,156.40 a troy ounce.
Write to Josie Cox at firstname.lastname@example.org and Tommy Stubbington at email@example.com