Stocks gain on hopes of Greece deal
U.S. stocks rallied at the end the day on Tuesday, 10 February 2015 sending the benchmark S&P 500 to its highest close this year. Investor optimism was fueled by hopes that embattled Greece and its creditors are nearing a compromise to avert a default, even though both sides continued to reiterate statements that suggests an accord is far from imminent. Earlier in the trading session, European and U.S. equities got a boost after news reports offered hope that the European Commission was considering a six-month debt extension. However, investors remained optimistic even though rumors of an extension were dismissed by Germany's finance minister Wolfgang Schble.
The Dow Jones Industrial Average jumped 139.55 points, or 0.8%, to 17,868.76. The Nasdaq Composite added 61.63 points, or 1.3%, to 4,787.64. The S&P 500 closed 21.84 points, or 1.1%, higher at 2,068.58 and turned positive for the year.
Nine of the 10 main sectors finished higher led by healthcare and technology sectors, while energy-sector stocks ended with modest losses, following a drop in oil prices. 26 of 30 member Dow components ended with gains.
On Tuesday, the dollar bounced back from some losses seen a day earlier and U.S. stocks advanced on hopes for an agreement between Greece and its international creditors. Strength in the dollar and equities lured some investors away from gold.
Focus of the world market place is still on Greece's new government, which says it is abandoning a good portion of its heretofore agreed upon debt reduction and austerity measures. Those measures were a prerequisite for Greece to get more financing from the European Union. There is a EU and Greek officials meeting set for Wednesday on the matter. Germany is taking a hard line with Greece, saying the country needs to honor its previous obligations. Traders and investors are in a more risk averse mood this week as this situation plays out. There are worries Greece could exit the European Union, which would open the door to other, smaller EU countries doing the same.
Chinese inflation fell to a five-year low in January, mainly due to falling raw commodity prices led by crude oil, and weaker demand. China's consumer price index was up 0.8% in January, year-on-year. China also injected liquidity into its financial system for the seventh week in a row, in another effort to boost its economy.
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In economic news, small-business sentiment slipped in January on a decline in optimism over sales growth and business conditions, according to a gauge released Tuesday.
Separately, job openings in the U.S. rose in December to the highest since 2001 and the number of people hired climbed to the highest level since 2007. The report follows last week's strong jobs report, which showed the economy added 257,000 jobs in January.
Among stocks under focus, Coca-Cola shares rose 2.8% after quarterly results beat expectations, the beverage and snacks company referred to 2015 as a transition year. CVS shares rose 2.1% after the pharmacy chain reported earnings above estimates. Apple will reportedly push ahead with plans Tuesday to sell a debut bond in Swiss francs. Shares rose 1.9%.
Bullion prices ended lower at Comex on Tuesday, 10 February 2015. Gold futures settled with a loss of more than $9 an ounce on Tuesday, with strength in the U.S. dollar and a rise in equities dulling the metal's appeal, but investors continue to keep an eye on ongoing turmoil in Greece. Crude oil prices were sharply lower today.
Crude-oil futures fell more than 5% to their lowest settlement level in nearly a week on Tuesday, 10 February 2015 at Nymex as concerns about a persistent supply glut resurfaced ahead of weekly U.S. inventory updates. Prices for the U.S. benchmark had tallied a climb of nearly 9% over the past three trading sessions, partly due to expectations that declines in active drilling rigs would help ease the oil supply surplus.
Light, sweet crude futures for delivery in March on the New York Mercantile Exchange fell $2.84, or 5.4%, to settle at $50.02 a barrel.
The International Energy Agency, in its medium-term outlook released Tuesday, said it expects Brent to average $55 a barrel in 2015, edging up to $60 in 2016 and hitting $73 by 2020. The group also said that a price recovery seemed inevitable, with the oil glut starting to ease as soon as the second half of the year. By comparison, the U.S. Energy Information Administration in a monthly report issued Tuesday forecast an average of $58 for Brent crude and $55 for West Texas Intermediate crude in 2015 unchanged from the previous report.
Gold for April delivery shed $9.30, or 0.8%, to settle at $1,232.20 an ounce on Comex. March silver dropped almost 20 cents, or 1.2%, to $16.87 an ounce.
Treasuries spent some time on either side of their flat lines before locking in slim losses with the 10-yr yield higher by a basis point at 1.99%.
Participation was below average for the second consecutive day with roughly 770 million shares changing hands at the NYSE floor.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the Treasury Deficit for January (consensus $19.00 billion) will be reported at 14:00 ET.
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