Market Recap: Stocks Slightly Up as Greece Again Steals Headlines
Markets closed up on Wall Street today: Dow +0.04%, S&P +0.22%, Nasdaq +0.41%, Oil +0.68%, Gold -0.71%.
On the commodities front, Oil (NYSE:USO) rose to $99.08 a barrel. Precious metals were down, with Gold (NYSE:GLD) falling to $1,736.00 an ounce while Silver (NYSE:SLV) fell 0.58% to settle at $34.00.
Today’s markets were up because:
1) Greece. It seems almost redundant to mention Greece at all. You’re probably all growing sick of hearing the same news day after day — progress has been made in negotiations, but with a deadline fast approaching, leaders have yet to make a deal — and yet the little Mediterranean country continues to make more headlines than the Kardashians. Unfortunately, investors continue to monitor developments in Greece rather closely, and as a result, small advances or hiccups are usually felt in the markets. Today was no different. Greek Prime Minister Lucas Papademos is meeting with political party leaders to discuss a draft of proposed spending cuts, including layoffs and pension reforms, that are a precondition for Greece to receive more bailout money from international lenders, the so-called troika consisting of the European Commission, European Central Bank, and International Monetary Fund. And if you’ve kept up with the headlines, you’ll know how important it is that Greece receive those rescue funds.
2) Earnings. News of Greece was even less substantial today than it has been in the preceding weeks. Markets seem to have begun to discount the fact that Greece is headed for an orderly default, instead focusing on more substantial facts and figures, namely earnings. Scores of U.S. companies have reported quarterly results over the past few weeks, some of which have been poor, but many of which have been better than expected. Today the trend continued, with Sprint (NYSE:S) trading lower as the expense of launching the iPhone took a bite out of fourth-quarter profits, while Time Warner (NYSE:TWX), CVS Caremark (NYSE:CVS), and Buffalo Wild Wings (NASDAQ:BWLD) all reported steep increases in quarterly revenue that had shares trading higher today.
3) Rally. Oftentimes a rally can be self-perpetuating. Yes, earnings have been more optimistic than in quarters passed, but also Americans are ready for the economy to get back on track. It helps that most major economic reports have been relatively positive this last month. Unemployment fell another two-tenths of a percent, while service and manufacturing sector gauges have demonstrated improvement, but ultimately investors are choosing to take risks, choosing to believe that the European debt crisis will eventually be worked out and that the economy will continue to create more jobs. Faith in the recovery may be what finally effects a recovery, as Americans respond to positive data by putting more money into the markets and by increasing spending.
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