Markets’ volatile run yesterday ended with benchmarks closing flat as positive signs from across the Atlantic erased almost all of the day’s losses during the final hour. The benchmarks may have closed mixed or just slightly higher from levels they started the day with, but this was a great rebound from the slump they suffered earlier during the day. Materials were a big catalyst and tech-bellwether Apple once again enabled Nasdaq to finish in the green.
The Dow Jones Industrial Average (:DJI) slipped a mere 0.1% or over 6 points to end at 12,496.15. The Standard & Poor 500 (S&P 500) gained 0.2% and moved a little over 2 points higher to finish yesterday’s trading session at 1,318.86. The tech-laden Nasdaq Composite Index was up 0.4% and closed at 2,850.12. The fear-gauge CBOE Volatility Index (:VIX) dropped 0.7% and settled at 22.33. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 7.52 billion shares, higher than the year-on-year average of 6.84 billion shares. Advancers edged past the decliners on the NYSE; as for three stocks that gained, two stocks traded lower.
Yesterday’s volatile run was quiet akin to Tuesday’s session, except that on Tuesday the benchmarks traded higher all day long only to lose almost all of these gains in the final hour. On Wednesday, it was the other way round. Benchmarks lingered in the red all day long, making a comeback only during the final hour. Moreover, late-hour concerns of Tuesday spilled on to Wednesday morning. Former Greek Prime Minister Lucas Papademos told Dow Jones Newswires that Greece was preparing to exit the euro. Greek concerns are nothing new for the benchmarks though, and it continued to affect the sentiments on Wednesday. Additionally, reports suggested that some European officials were of the view that euro zone members needed to step up a contingency plan if Greece were to leave the euro. Reportedly, this consensus was reached via a teleconference of the Eurogroup Working Group (EWG).
However, while Lucas Papademos told CNBC that he had no knowledge of any preparation by Greece for an euro exit, reports of a contingency plan were also rubbished by the Greek Finance Ministry. According to an email from the ministry: "The Ministry of Finance categorically denies the reports stating that during the teleconference of the Euro Working Group on May 21st 2012, it was agreed that each euro zone country should prepare contingency plans for the potential consequences of a departure of the Hellenic Republic from the single currency area… "Such reports not only are false, but actually hinder the efforts of the Hellenic Republic to address its challenges at this critical juncture".