July 14, 2024

Wall Street Moves Higher as Stocks Look Beyond Greece

The downturn brought the Standard Poor’s 500-stock index close to its average level of the prior 200 days. So long as the index doesn’t sink far below that level, many technical traders see it as a sign to start buying stocks again. The S.P. is now 6 percent below the 2011 high it reached on April 29.

“In the short term, stocks have been oversold, and you’re going to get some sort of bounce, whether justified or not, just for technical reasons,” said Paul Simon, chief investment officer for Tactical Allocation Group, which has $1.5 billion in assets under advisement.

The S.P. 500 index rose 6.86 points, or 0.54 percent, to 1,278.36. The Dow Jones industrial average added 76.02 points, or 0.63 percent, to 12,080.38. The Nasdaq composite index gained 13.18, or 0.50 percent, to 2,629.66.

Health companies like Aetna Inc. and Humana Inc. rose nearly 1 percent, the largest gain among the 10 industry groups that make up the S.P. 500 index. Financial companies like Morgan Stanley, which lost 2.2 percent, were the only group to lose ground.

The S.P. 500 was on pace for its third straight day of gains, which would be the longest stretch of increases in the stock market for nearly a month. The index eked out a tiny gain last week, breaking a six-week losing streak driven by concerns that U.S. economic growth would falter in the second half of the year and that Greece’s debt crisis would spread. It was the S.P.’s longest slide since 2002.

Signs that the European financial crisis may be contained helped ease investor’s concerns. European Union officials in Luxemburg said Monday that the EU would raise their guarantees for bailout loans in order to boost market confidence.

European leaders failed over the weekend to agree on releasing more financial aid to Greece, saying the country must first agree to more budget cuts. Greece’s recent efforts to slash spending have led to street protests and political turmoil in Athens. The Greek government faces a confidence vote on Tuesday.

Some analysts say investors are ready to move beyond the Greek crisis and focus on corporate earnings and the U.S. economy.

“There’s a little fatigue about hearing about the same problems, and there’s no shock factor anymore,” said Oliver Pursche, president of Gary Goldberg Financial Services. Traders are now starting to look ahead to the Federal Reserve’s two-day policy meeting, which begins Tuesday, and the next round of corporate earnings reports that begin in July, he said.

Analysts expect that operating earnings per share for companies in the S.P. 500 index rose 14 percent in the second quarter. They also expect the Fed to keep interest rates at nearly zero, a record low.

Article source: http://feeds.nytimes.com/click.phdo?i=416669f0e425b273eea6d2504cdf2412

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