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Greece crisis: Worries resurface as some lenders don't accept proposals

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Greek Finance Minister Yanis Varoufakis, left, speaks with Irish Finance Minister Michael Noonan at the start of the annual meeting of the European Stability Mechanism Board in Luxembourg on Thursday, June 18, 2015. German Chancellor Angela Merkel is pressing Greece to deliver on commitments to carry out reforms, stressing that she wants the country to remain in the common currency. (AP Photo/Virginia Mayo)

Greek Finance Minister Yanis Varoufakis, left, speaks with Irish Finance Minister Michael Noonan at the start of the annual meeting of the European Stability Mechanism Board in Luxembourg on Thursday, June 18, 2015. German Chancellor Angela Merkel is pressing Greece to deliver on commitments to carry out reforms, stressing that she wants the country to remain in the common currency. (AP Photo/Virginia Mayo)

Greek Finance Minister Yanis Varoufakis, left, speaks with Irish Finance Minister Michael Noonan at the start of the annual meeting of the European Stability Mechanism Board in Luxembourg on Thursday, June 18, 2015. German Chancellor Angela Merkel is pressing Greece to deliver on commitments to carry out reforms, stressing that she wants the country to remain in the common currency. (AP Photo/Virginia Mayo)

Greece's debt talks have taken a setback and Prime Minister Alexis Tsipras has attacked the stance of "certain" creditors as "strange" because they rejected proposals presented by Athens to bridge a budget gap, a government official said without referring to specific proposals or which of the three institutions Tsipras was blaming for the deadlock.

Tsipras will meet the heads of the European Central Bank, the International Monetary Fund and the European Commission in Brussels before a meeting of euro zone finance ministers at 1300 p.m. ET.

Greece needs fresh funds to avoid defaulting on a $1.8 billion debt repayment to the IMF on June 30.

"Tensions seem elevated between Greece and its creditors," said Adam Sarhan, chief executive of Sarhan Capital in New York.

"There are worries that if Greece defaults, how will it affect the global economy because of the ramifications in peripheral nations like Portugal, Spain and Italy."

The U.S. Commerce Department said gross domestic product fell at a 0.2 percent annual rate in the January-March quarter, instead of the 0.7 percent it estimated last month.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was revised to a growth of 2.1 percent from 1.8 percent.

Investors have been keeping a keen eye on economic data to see if the U.S. economy has recovered from a slow start at the beginning of the year. The Federal Reserve has said it remains data-dependent and expects to raise rates when it sees a sustained rebound in the economy.

Most economists and top Wall Street banks expect the Fed to raise rates in September as data points to a recovery.

Applications for U.S. home mortgages rose last week as interest rates dipped. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 1.6 percent in the week ended June 19.

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