US markets posted heavy losses for the second successive day of trading, amid fears Greece is set to default on a €5bn debt payment due next week.
According to the FT, Greece, which was granted a €174bn bailout by the European Central Bank, is struggling to meet the €5bn debt obligation.
With Greece stalling, eurozone leaders now face a new round of brinkmanship on how to reduce Greece's sky-high debt levels.
Coupled with fears over the fiscal cliff in the US, investors moved to take profits for a second day, with the Dow shedding 120 points or 0.94% to close at 12,811 overnight. The fall left it at a three-month low.
Meanwhile, the S&P 500 fell 1.22% to 1,377, one of its biggest one-day declines year to date.
As well as woes in Europe, US lawmakers yesterday warned growth in the world's largest economy would take a 3% hit next year if the Bush-era tax cuts are not maintained or extended.
Meanwhile in the UK today, markets got off to a lacklustre start, with the FTSE 100 down 20 points to 5,756. The index closed lower on Thursday.
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