August 6, 2021

Market Extends Its Rally

Stocks rose on Tuesday, with the Standard Poor’s 500-share index extending its three-day rally to an intraday high, although profit-taking in technology shares capped gains.

In afternoon trading the S.P. was up 8.18 points, or 0.5 percent, to 1,625.68. The Dow Jones industrial average was up 76.91 points, or 0.5 percent, to 15,045.80. The Nasdaq composite Index rose 6.08 points, or 0.2 percent, to 3,398.96.

The tech sector, which had been among the gainers for the past couple of days, turned negative as a decline in Apple weighed heavily on the Nasdaq composite index.

Shares of First Solar and video subscription company Netflix were also down, pressuring the index.

Equities this year have gone without a sustained pullback as investors use any market decline to add to positions. Many analysts expect markets to trend higher, but some see a near-term pullback, citing a lack of positive catalysts and mixed economic data.

“The payroll report indicated that things are better than we were thinking in terms of growth, so until the market finds proof otherwise against the recovery, stocks will continue to move generally higher,” said Andres Garcia-Amaya, global market strategist with J.P. Morgan Funds in New York.

“There are still things to be concerned about, but stocks remain cheap and the biggest risk is to try and time a correction rather than follow the trend.”

Apple shares fell 0.7 percent in volatile trading after rising for the past three sessions. First Solar shares were off 9.2 percent after reporting earnings below Wall Street expectations late Monday. Netflix shares were off 1.9 percent.

Both Fossil and DirecTV reported earnings that surged past expectations. Fossil jumped 9.4 percent as one of the S.P.’s top percentage gainers, followed by DirecTV, up 6.8 percent.

Overseas, European shares rose about 0.3 percent on positive earnings, and the DAX in Frankfurt reached an all-time high after the release of data showing German industrial orders rose in March, confounding expectations of a drop.

Japan’s Nikkei stock market, which had been closed on Monday, jumped in a delayed reaction to Friday’s jobs data in the United States. The Nikkei ended the day up 3.6 percent. In Hong Kong the Hang Seng rose 0.6 percent and the Shanghai composite closed up 0.2 percent.

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U.S. Markets Calm as Greece Weighs on Europe

Markets were lower in Europe, pressured by financials, as investors sold riskier assets after talks on a revised bailout package for Greece highlighted the fragile debt situation in peripheral euro zone countries.

In the United States, the major averages rose slightly in the first half-hour of trading. The Dow Jones industrials were up 23.31, or 0.2 percent, to 12,662.05. The Standard Poor’s 500-stock index showed a similar gain, and the Nasdaq composite was marginally higher.

Commodities bounced some way back on Monday from their biggest weekly drop since 2008, revived by a weaker dollar and strong United States jobs data, which helped restore some confidence to a shaken investment community.

Brent crude oil broke above $111 a barrel and United States silver leapt by more than 5 percent after data from Washington on Friday showed private employers added jobs at the fastest pace in five years in April.

The dollar slipped against a basket of currencies as as heartened investors turned to higher-yielding, riskier assets, to the benefit of commodities.

In Europe, the FTSEurofirst 300 index of top European shares was down 0.8 percent after rising 1.2 percent on Friday. The index has fallen in four out of five sessions and is up just 1.4 percent this year.

Financials were among the top decliners, with the STOXX Europe 600 banking index falling 1.5 percent and Bank of Ireland down 3.7 percent. The National Bank of Greece fell as much as 5.7 percent after Standard Poor’s cut the rating on Greece’s sovereign debt to B from BB- and said that may hurt the creditworthiness of the country’s four biggest banks.

After an unannounced meeting of top euro zone finance officials in Luxembourg on Friday night, Jean-Claude Juncker, chairman of the euro zone’s finance ministers, said there was consensus that Greece needed a new plan.

A 110 billion euro, or $157 billion, rescue of Greece was negotiated last May.

“This has potential to disrupt the market in the near term as it looks increasingly likely that we will see another adjustment package for Greece,” said Klaus Wiener, chief economist at Generali Investments.

“The credit crisis is unlikely to be over for quite a while,” Mr. Wiener said. “We need to see first that those countries which are not so much under market pressure right now stick to their consolidation path, otherwise they will not be able to regain the necessary market trust. And rebuilding trust takes time.”

The Euro STOXX 50, the euro zone’s blue chip index, fell 1.9 percent.

Among individual movers, Barclays and HSBC fell 1.2 percent and 1.5 percent respectively after Barclays said it would make a £1 billion, or $1.6 billion, provision in the second quarter of 2011 to cover the costs related to sales of payment protection insurance, with HSBC setting aside $440 million.

MAN was up 3.2 percent after Volkswagen said it was making an offer for the company. The truck maker Scania jumped 6.9 percent because the company is in talks with MAN over a potential tie-up.

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