…as Wall St keeps up its winning run
US stocks ended a volatile quarter yesterday with their biggest four-day rally since September as positive economic data and a temporary resolution of Greece’s debt crisis indicated further gains in July.
Midwest business activity showed surprising strength this month, lifted by a jump in new orders, the Institute for Supply Management-Chicago said. That helped calm concerns about the economy that have weighed on markets for two months.
Overseas, Greece’s parliament approved measures to implement budget cuts and assets sales, making Greece eligible for financial aid to avoid a debt default.
Major indices rose, including the benchmark Standard & Poor’s 500, which climbed above its 50-day moving average at 1,317, suggesting an accelerated move higher was possible. The index is up 4.1 per cent so far this week, its best four-day rally since September 2010.
“The resolution in Greece allows us to throw away one more question mark, and as we do that we become more confident,” said Peter Andersen, portfolio manager at Congress Asset Management in Boston. “Managers are also using the occasion to trim their cash positions at the midway point through the year, meaning we’ll start July with optimism.”
For the second quarter, the Dow rose 0.8 per cent while the S&P 500 cut sharp losses to end down 0.4 per cent and the Nasdaq slipped 0.3 per cent. In June, the S&P fell 1.8 per cent, the Dow lost 1.3 per cent and the Nasdaq shed 2.2 per cent.
Concerns that a Greek default could spark another global credit freeze had been a major headwind for stocks since May, sending the S&P down more than five per cent at one point, though most of those losses were recouped this week.
All ten S&P business sectors rose yesterday, led by industrials, up 1.7 per cent, and information technology, up 1.4 per cent. Heavy-equipment maker Joy Global rose 5.7 per cent to $95.24 (£59.44) for the biggest percentage gain on the S&P while software company NetApp added 5.6 per cent to $52.78.
The Dow Jones industrial average was up 152.92 points, or 1.25 per cent, at 12,414.34. The S&P 500 Index was up 13.23 points, or 1.01 per cent, at 1,320.64. The Nasdaq Composite Index advanced 33.03 points, or 1.21 per cent, at 2,773.52.
Part of the rally came from end-of-quarter window dressing by fund managers, who typically sell losers and buy winners to make their portfolios look better.