15 Reasons Greece, Oil and Technology Led Markets
Dow 11,934 S&P500 1,268 Nasdaq 2,652 Gold 1,502 Oil 91
The Dow (NYSE:DIA) and S&P (NYSE:SPY) fell this week. However, the Nasdaq (NASDAQ:QQQ) was able to pull out a victory for bulls. Oil (NYSE:USO) barely budged after big news. Gold (NYSE:GLD) and Silver (NYSE:SLV) headed back to critical support lines.
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Now, for the 15 reasons markets moved this week:
1) No Big Earnings Reports. Just about every day it seems some big company announces dismal earnings below expectations and their plummeting share prices pull down the market. But today no such news. With the slowly recovering economy taking a turn for the worse this past month, no news is good news. In the meantime, check out our new Wall St. Cheat Sheet earnings sneak peeks: Micron Technology Inc. Third Quarter Earnings Sneak Peek.
2) Hope for Greece. EU leaders have expressed their confidence that a Greek aid package will be decided upon shortly, and it seems likely they might be able to avoid a default. The absence of bad news is giving the euro a boost. A resolution should come any day now, and analysts expect investor relief to account for significant gains on all the indices. Check Out: Greece Getting Desperate, Will Sell off State Assets.
3) Big Individual Company News. The indexes were all propped up today by a few big companies with big gains. Ford (NYSE:F) shares were up as they announced plans to revamp the Lincoln brand, while fellow Detroit-based competitor GM (NYSE:GM) also saw shares rise today. Wal-Mart (NYSE:WMT) shares were up after they won their Supreme Court sex bias case, while the healthcare and consumer discretionary sectors showed the highest gains today, while the tech sector was also up with big gains from Caterpillar (NYSE:CAT) and DuPont (NYSE:DD) leading the way.
1) Investors smell some sort of resolution in Greece. Although ratings agencies are sending more warnings to Greece, the media is reporting a lot of aggressive chatter regarding the EU stepping in to save Greece. At the end of the day, that removes the probability of a Lehman style event. Now check out which Companies have dangerous exposure to Greece and which Countries do too.
2) US Existing Home Sales sucked. Yup. If you’re looking for positive data points in the US economy, turn your head 180 degrees away from the housing market (NYSE:IYR). The always bullish National Association of Realtors sales fell by 3.8% in May, at an annual pace of 4.81 million, down 15.3% from last years mark of 5.68 million by the same point in the year.
3) Apple finally caught a bid. After some big time selling in Apple (NASDAQ:AAPL), the company is now rumored to be releasing a major iteration with the release of iPhone 5. Add that to all the shareholders who are filling the blogosphere with articles about “Apple as a Value Stock”, and it was a matter of time before the buyers stepping in.
1) Good news from Greece? Step one, vote of confidence for Prime Minister George Papandreou. Check. First positive news of the day. Step two, austerity measures passed. Check. Papandreou’s cabinet needed to win the vote today if they wanted to proceed with plans for an austerity package that would be necessary in order to ensure the next tranche of aid money from the EU and IMF. That aid money is the only thing that seems to be standing in between Greece and default, and now that it seems likely the new measures will stick, though they’re subject for review until they become official next month, default is looking less and likely, allowing the world to breathe a collective sigh of relief.
2) FedEx Earnings. FedEx (NYSE:FDX) had a positive quarterly earnings report despite the increasing cost of fuel. To offset transportation costs, the delivery service capped the size of their fleets, raised fuel surcharges, and just generally raised prices. The pricing increase could have lost FedEx some customers, but with the expansion of global trade, customers ultimately accepted the higher price tag and absorbed the costs. On another note, Apple (NASDAQ:AAPL) may have leaked info about their new iPhone 5, slated for September release. Until today, Apple had not mentioned a possible release date or new features on the phone. It seems likely to be a strategy to keep the stock from continuing to plummet as it has done since an unimpressive WWDC earlier this month. Don’t Miss: Did Apple Leak the iPhone 5 to Boost Falling Stock Prices?
3) Bernanke is a downer. It seems every time the man speaks, markets fall. Markets started the day in negative territory but were making modest gains before Bernanke’s news conference this afternoon. Bernanke spoke of the weakness of the financial sector, the weakness of the housing market, and then after his speech, the Fed downgraded their assessment of the economy and gave no indication of plans to boost growth or create jobs. So all in all, the afternoon was a bit of a downer, pulling the major indices into negative territory.
1) Housing and jobs data. The Department of Commerce released data today showing that new home sales decreased month-over-month in May. U.S. jobless claims were expected to fall to 415,000 last week, but instead were up 9,000 to 429,000
2) Tech sector gains. The tech-heavy Nasdaq was the only index in the green today with companies like Apple (NASDAQ:AAPL), Research in Motion (NASDAQ:RIMM), and Intel (NASDAQ:INTC) leading the way. Too bad Micron (NASDAQ:MU) and Oracle (NASDAQ:ORCL) just missed earnings expectations! Learn More: Oracle Corp Earnings Cheat Sheet: Double-Digit Growth Again and Micron Technology Inc. Earnings: Margins Suffer as Costs Rise, Profit Falls.
3) IEA releases crude reserves. In terms of the markets, this was mostly bad news. It pushed down prices for oil companies, with two big players, Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM), dragging down the Dow Jones Industrial Average. It also sent crude futures plummeting to below $90 a barrel at one point, ultimately settling 3.89% down for the day. The Energy Select Sector SPDR (NYSE:XLE) also took a big hit, but recovered slightly to close the day 1.09% in the red. The news did, however, give the NYSE Arca Airline Index (XX:XAL) a bit of a boost as airlines anticipated lower fuel prices.
1) Tech slump. Both Oracle (NASDAQ:ORCL) and Micron Technology (NASDAQ:MU) suffered huge losses in the market today, weighing heavily on tech stocks. The Nasdaq Composite, up 0.66% yesterday is down 1.16% today. Tech was also the worst performer of the 10 sectors on the S&P 500. Blue chips were dragged down as well by the Dow’s tech members like Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), and Cisco (NASDAQ:CSCO). All in all it was a terrible day for tech (NYSE:XLK).
2) Italy might be the new Greece. Also Ireland, Portugal, and maybe Spain (NYSE:EWP). Really no one’s being left out of the party. After Moody’s put 12 Italian government-related financial institutions on review for possible downgrade, people are worried that it might be too late to contain Greece’s debt woes — they may have already contaminated other borderline economies. Spanish and Italian bond yields are up, with Spain’s 10-year bond reaching its highest level since 2000. And Italy (NYSE:EWI) has a national debt that totals 120% of GDP, a figure that seems unlikely to improve considering long-term structural weaknesses and low productivity. Greece may only be the first domino to fall.
3) Positive economic data? The latest GDP report came out this morning and the figures were better than previous estimations, showing durable goods rose more than expected in May after suffering a 2.7% decline in April. But the report couldn’t have come out at a worse time, overshadowed by today’s tech losses and renewed fears in Europe, as well as still-low crude futures and plummeting oil-related stocks.
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