Delays in Eurozone keep markets flat
US stocks closed flat in another thinly traded session yesterday as Greece remained in a standstill over accepting tough reforms in exchange for a bailout critical to avoiding a chaotic default.
Underlying confidence kept the Dow near an almost four-year high notched on Tuesday, though trading has been quiet since last week’s stellar employment report. The S&P and Nasdaq are both up 0.3 per cent so far this week while the Dow is essentially unchanged.
Randy Frederick, director of trading for Charles Schwab in Austin, Texas, said he would use any pullback on Greece as a buying opportunity. “And if the situation there gets resolved, we’ll move higher even faster.”
Greek party leaders gathered yesterday to agree reforms demanded by the European Union and the International Monetary Fund after delays.
European Central Bank policymakers were still divided on what contribution the bank could make to a restructuring of Greece’s sovereign debt, sources said. The ECB has ruled out joining private creditors in voluntarily accepting a reduction in the value of the Greek bonds it holds.
“We would take a hit if Greece is unable to come to a deal, but lately we’ve been decoupling from Europe as markets catch up to how strong the economy appears to be,” said Frederick.
Dow component Walt Disney rose 0.7 per cent to $41.27 a day after it reported quarterly profit that topped expectations.
Of the 315 companies in the S&P 500 that have reported earnings to date, 61 per cent have come in above analysts’ expectations, a rate below that of previous quarters.
The Dow Jones industrial average was up 5.75 points, or 0.04 per cent, at 12,883.95. The Standard & Poor’s 500 Index was up 2.91 points, or 0.22 per cent, at 1,349.96. The Nasdaq Composite Index was up 11.78 points, or 0.41 per cent, at 2,915.86.
The Dow on Tuesday marked its highest close since May 2008; stocks have rallied from late last year on central bank action and signs of an improving economy.
Polo Ralph Lauren surged 9.2 per cent to $171.49 after the clothing maker reported better-than-expected results for the holiday quarter and raised its margin forecast.
Energy shares were the biggest decliners, as Brent and US crude oil futures pared gains after a report showed a build-up in US crude inventories. The S&P energy index fell 0.5 per cent.