Benchmarks ended Tuesday’s choppy trading session slightly higher after Greece submitted a two-year bailout proposal to its lenders. Separately, the Nasdaq was lifted by gains in biotech stocks. Meanwhile, all three indexes closed in the red for the month. For the quarter, the S&P 500 and the Dow ended in the red, while the Nasdaq finished in positive territory.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) gained 0.1% to close at 17,619.51. The Standard & Poor’s 500 (S&P 500) advanced 0.3% to 2,063.11. The tech-laden Nasdaq Composite Index closed at 4,986.87; increasing 0.6%. The fear-gauge CBOE Volatility Index (VIX) dropped 3.3% to settle at 18.23. A total of about 4 billion shares were traded on the NYSE on Tuesday. Advancers outpaced declining stocks on the NYSE. For 59% stocks that advanced, 38% declined.
Greece’s last-ditch efforts to resolve the breakdown in cash-for-reform talks with its creditors was welcomed by investors. The Greek government asked for a new bailout plan to help the country pay a debt of about 29.15 billion euros due between 2015 and 2017. Greece has already defaulted on its debt payment of 1.55 billion euros to the International Monetary Fund (IMF) on Jun 30. Greece became the first developed nation to default on a debt payment to the IMF after its lenders turned down its request to buy more time.
Meanwhile, German Chancellor Angela Merkel said that there won’t be any new deal with Greece before the country faces a referendum. The Greek government had called for a referendum on whether to accept the cash-for-reform measures as demanded by its creditors. The country’s parliament approved Greece Prime Minister Alexis Tsipras’ call for a referendum to be held on Jul 5.
Separately, gains in biotech stocks boosted the Nasdaq. Biotech stocks such as Gilead Sciences Inc. (GILD), Biogen Inc. (BIIB), Amgen Inc. (AMGN) and Celgene Corporation (CELG) increased 1.4%, 1.9%, 1.3% and 0.7%, respectively. The iShares Nasdaq Biotechnology (IBB) gained 2.3%, while the broader Health Care Select Sector SPDR (XLV) advanced 0.4%.
The Energy Select Sector SPDR (XLE) gained 0.7%, the highest among the S&P 500 sectors. Energy shares advanced amid rise in oil prices. The prices of WTI crude oil and Brent crude oil increased 1.9% and 2.5% to $59.47 per barrel and $63.59 a barrel, respectively. Iran and six other world powers extending the deadline for nuclear talks along with expectations of a decline in U.S. oil production levels were cited to be the reasons behind this rise in oil prices.
Key stocks from the energy sector including Exxon Mobil Corporation (XOM), Schlumberger Limited (SLB), ConocoPhillips (COP) and Transocean Ltd. (RIG) increased 0.5%, 0.6%, 0.7% and 1.1%, respectively. Overall, 8 out of 10 sectors of the S&P 500 ended in the green.
Coming to economic data, the Conference Board reported that Consumer Confidence Index advanced to 101.4 in June from 94.6 in May. The number came in ahead of the consensus estimate of the index increasing to 97.8.
Separately, the Supply Management-Chicago noted that Chicago Business Barometer increased to 49.4 in June from May’s reading of 46.2. However, this rise in the Chicago Purchasing Managers Index in June was lower than the Zacks Consensus Estimate of an increase to 50.7.
For the month the S&P 500, the Dow and the Nasdaq declined 2.1%, 2.2% and 1.6%, respectively. Benchmarks ended in the red for the month as uncertainty over Greece’s bailout program weighed on investor sentiment. Negotiations between Greece and its lenders made little progress due to significant differences over pension cuts and tax increases, aimed at helping the country avoid a default.
Additionally, weakness in energy and transportation stocks also had a negative impact on benchmarks. However, a new ruling by the Supreme Court on the Affordable Care Act helped healthcare stocks buck the broader declining trend.
Meanwhile, the Federal Reserve signaled it will hike interest rates at a slower than expected pace. An overwhelming majority of Fed officials had said that the improving U.S. economy is strong enough to withstand one or two rate hikes this year.
Rise in consumer prices, jobless claims hovering near a 15-year low, upbeat housing data, encouraging retail sales report and uptick in consumer spending bolstered the view that the economy is recovering after a weak first quarter economic growth.
The first quarter output of goods and services had decreased at an annual rate of 0.2%. U.S. first quarter GDP data came in weaker than expected due to harsh winter weather, cheaper oil prices, stronger dollar and disruptions in Western Coast ports.
For the quarter, the S&P 500 and the Dow declined 0.2% and 0.9%, respectively, while the Nasdaq gained 1.8%. While concerns over Greek debt crisis affected the broader markets, a handful of upbeat earnings to some extent boosted investor sentiment.
Berkshire Hathaway Inc. (BRK-B), Comcast Corporation (CMCSA), The Walt Disney Company (DIS), International Business Machines Corporation (IBM), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C), Pepsico, Inc. (PEP), The Coca-Cola Co (KO), The Boeing Company (BA), UnitedHealth Group Inc. (UNH), Intel Corporation (INTC), Johnson & Johnson (JNJ), Merck & Co. Inc. (MRK), and Pfizer Inc. (PFE) poster better than expected quarterly earnings results.
Prospects of Visa Inc. (V) gaining access to China, McDonald's Corp.’s (MCD) turnaround plans and new deal between Mylan N.V. (MYL) and Teva Pharmaceutical Industries Limited (TEVA) boosted investor confidence.
Separately, European Central Bank’s decision to keep interest rates unchanged while continuing with its asset purchasing program was welcomed by investors.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
GILEAD SCIENCES (GILD): Free Stock Analysis Report
BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
AMGEN INC (AMGN): Free Stock Analysis Report
CELGENE CORP (CELG): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
CONOCOPHILLIPS (COP): Free Stock Analysis Report
TRANSOCEAN LTD (RIG): Free Stock Analysis Report
BERKSHIRE HTH-B (BRK.B): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis Report
DISNEY WALT (DIS): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
To read this article on Zacks.com click here.