U.S. Stocks Rise Amid Optimism on Chances for Greece Debt Deal.
1 July 2015, 17:42
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U.S. stocks rose, after equities capped their worst quarter since 2012, as Greece signaled it was ready to compromise to end a standoff over a bailout.
Financial shares in the Standard & Poor’s 500 Index headed for the biggest gain in three weeks as Chubb Corp. surged 30 percent after Ace Ltd. agreed to buy the insurer for $28.3 billion in cash and stock. Ace climbed 3.2 percent, while Travelers Cos. gained 2.8 percent, the most since January. Energy companies retreated as oil fell on higher supplies.
The S&P 500 climbed 0.7 percent to 2,077.94 at 11:30 a.m. in New York, near its average price during the past 150 days. The Dow Jones Industrial Average added 129.16 points, or 0.7 percent, to 17,748.67. The Nasdaq Composite Index also advanced 0.7 percent.
“The prospects of removing some of the macroeconomic uncertainty associated with Greece is boosting stocks,” said Mark Luschini, chief investment strategist in Philadelphia at Janney Capital Management LLC, which oversees about $68 billion. “We also got an ADP report this morning that was much better than expected, which bodes well for tomorrow morning’s payroll report.”
Greek Prime Minister Alexis Tsipras said he’s willing to accept creditors’ latest offer as a basis for compromise. The July 5 referendum on more austerity and disagreements over pensions, spending and taxes remain sticking points. Greece missed a $1.7 billion repayment Tuesday to the International Monetary Fund after Europe’s leaders rebuffed its previous attempts to secure financing before bailout funding ended.
Greece Discussions
Equities trimmed their advance after Tsipras encouraged voters to reject proposed austerity measures as part of a bid to end a standoff with creditors. Euro area finance ministers will weigh the bid from Tsipras and European Central Bank policy makers are set to discuss whether to maintain their emergency lifeline.
The S&P 500 halted a nine-quarter winning streak Tuesday, losing 0.3 percent in the past three months and extending its worst start to a year since 2010. Prospects for higher interest rates and Greece’s travails have frozen a market that rose 47 percent between 2011 and 2013.
The index is still up 0.9 percent in 2015, holding in a tight range close to a record even after three years of double-digit gains, on optimism the economy is strong enough to withstand higher rates this year.
Employment Report
A report today showed companies in the U.S. boosted employment in June by 237,000, the most in six months. The June gain exceeded the Bloomberg median survey of economists that called for a 218,000 advance. Separate data showed manufacturing expanded in June at the fastest pace in five months, indicating domestic demand is allowing America’s factories to withstand sluggish overseas economies.
The Chicago Board Options Exchange Volatility Index slipped 8.7 percent Thursday to 16.65. The gauge, known as the VIX, surged 32 percent in June, its biggest monthly gain of the year.
Nine of the S&P 500’s 10 main groups advanced on Wednesday, with financial and raw-material shares adding more than 0.9 percent.
Chubb’s 30 percent surge led a 1.2 percent increase in S&P 500 financial shares, the biggest sector gain of the day. Insurers in the group also benefited from the deal, with Hartford Financial Services Group Inc., Travelers and Progressive Corp. rising more than 2.8 percent.
Materials, Casinos
Materials shares in the benchmark climbed 1 percent. Ball Corp. and Nucor Corp. increased more than 1.7 percent as industrial metals rebounded on optimism over a Greek resolution. Fertilizer maker CF Industries Inc. rose for a second day, up 2.1 percent and headed toward a record.
Casino companies paced a 0.8 percent gain in the consumer discretionary sector. Wynn Resorts Ltd. increased 5.5 percent, a day after reports that China eased restrictions on local tourists visiting Macau. Las Vegas Sands Corp. and MGM Resorts International climbed more than 2.7 percent.
The S&P 500 energy shares slid 0.6 percent as crude oil fell 2.4 percent, on track for its biggest decline since June 4. Ensco Plc, Consol Energy Inc. and Transocean Ltd. lost more than 3.5 percent.
Peabody Energy Corp. plunged 22 percent to an all-time low. The largest U.S. coal producer dropped after saying second-quarter earnings will miss an earlier forecast because of bad weather and lower prices for the variety of the commodity used by steelmakers.
Financial shares in the Standard & Poor’s 500 Index headed for the biggest gain in three weeks as Chubb Corp. surged 30 percent after Ace Ltd. agreed to buy the insurer for $28.3 billion in cash and stock. Ace climbed 3.2 percent, while Travelers Cos. gained 2.8 percent, the most since January. Energy companies retreated as oil fell on higher supplies.
The S&P 500 climbed 0.7 percent to 2,077.94 at 11:30 a.m. in New York, near its average price during the past 150 days. The Dow Jones Industrial Average added 129.16 points, or 0.7 percent, to 17,748.67. The Nasdaq Composite Index also advanced 0.7 percent.
“The prospects of removing some of the macroeconomic uncertainty associated with Greece is boosting stocks,” said Mark Luschini, chief investment strategist in Philadelphia at Janney Capital Management LLC, which oversees about $68 billion. “We also got an ADP report this morning that was much better than expected, which bodes well for tomorrow morning’s payroll report.”
Greek Prime Minister Alexis Tsipras said he’s willing to accept creditors’ latest offer as a basis for compromise. The July 5 referendum on more austerity and disagreements over pensions, spending and taxes remain sticking points. Greece missed a $1.7 billion repayment Tuesday to the International Monetary Fund after Europe’s leaders rebuffed its previous attempts to secure financing before bailout funding ended.
Greece Discussions
Equities trimmed their advance after Tsipras encouraged voters to reject proposed austerity measures as part of a bid to end a standoff with creditors. Euro area finance ministers will weigh the bid from Tsipras and European Central Bank policy makers are set to discuss whether to maintain their emergency lifeline.
The S&P 500 halted a nine-quarter winning streak Tuesday, losing 0.3 percent in the past three months and extending its worst start to a year since 2010. Prospects for higher interest rates and Greece’s travails have frozen a market that rose 47 percent between 2011 and 2013.
The index is still up 0.9 percent in 2015, holding in a tight range close to a record even after three years of double-digit gains, on optimism the economy is strong enough to withstand higher rates this year.
Employment Report
A report today showed companies in the U.S. boosted employment in June by 237,000, the most in six months. The June gain exceeded the Bloomberg median survey of economists that called for a 218,000 advance. Separate data showed manufacturing expanded in June at the fastest pace in five months, indicating domestic demand is allowing America’s factories to withstand sluggish overseas economies.
The Chicago Board Options Exchange Volatility Index slipped 8.7 percent Thursday to 16.65. The gauge, known as the VIX, surged 32 percent in June, its biggest monthly gain of the year.
Nine of the S&P 500’s 10 main groups advanced on Wednesday, with financial and raw-material shares adding more than 0.9 percent.
Chubb’s 30 percent surge led a 1.2 percent increase in S&P 500 financial shares, the biggest sector gain of the day. Insurers in the group also benefited from the deal, with Hartford Financial Services Group Inc., Travelers and Progressive Corp. rising more than 2.8 percent.
Materials, Casinos
Materials shares in the benchmark climbed 1 percent. Ball Corp. and Nucor Corp. increased more than 1.7 percent as industrial metals rebounded on optimism over a Greek resolution. Fertilizer maker CF Industries Inc. rose for a second day, up 2.1 percent and headed toward a record.
Casino companies paced a 0.8 percent gain in the consumer discretionary sector. Wynn Resorts Ltd. increased 5.5 percent, a day after reports that China eased restrictions on local tourists visiting Macau. Las Vegas Sands Corp. and MGM Resorts International climbed more than 2.7 percent.
The S&P 500 energy shares slid 0.6 percent as crude oil fell 2.4 percent, on track for its biggest decline since June 4. Ensco Plc, Consol Energy Inc. and Transocean Ltd. lost more than 3.5 percent.
Peabody Energy Corp. plunged 22 percent to an all-time low. The largest U.S. coal producer dropped after saying second-quarter earnings will miss an earlier forecast because of bad weather and lower prices for the variety of the commodity used by steelmakers.
