Benchmarks recouped their losses and moved into green territory
during the closing moments of Wednesday after Greek debt talks
promised a positive outcome. The indices had slipped into the red
during the initial hours of trading following news that the 17
euro-zone finance ministers had cancelled a meeting. Disappointing
retail sales data released by the Commerce Department's had also
dampened the mood. However, after Greek leaders promised to
implement strict austerity measures, benchmarks erased all the
losses closing the day on a positive note.
The Dow Jones Industrial Average had slipped 87 points during
yesterday's trading session, before rebounding during-- the final
hours to close 0.1% higher at 12,890.46. The Standard & Poor
500 edged up 0.2% to close Tuesday's trading session at 1,351.95.
The Nasdaq Composite Index gained 0.4% and finished at 2,927.23.
The fear-gauge CBOE Volatility Index (VIX) had crossed the 20 mark
during the day, but after positive during the closing hours it
receded back to settle at 19.54. The decliners had an upper hand
over the advancing stocks on the New York Stock Exchange (NYSE),
with 62% stocks declining as against 35% advancers. The remaining
3% of the shares were left unchanged. Total volume on the NYSE was
3.9 billion shares.
Markets had opened after news came in that the 17 euro-zone
finance leaders had scrapped their meeting scheduled for Wednesday.
The meeting scheduled for Wednesday was to approve the bond-swap
deal between Greece and its private creditors that would slash €100
billion from Greece's debt burden. Earlier, speaking about the
Greek debt crisis, German Chancellor Angela Merkel had said: "Time
is running out", and surely it is, as the swap deal must be
finalized by 20
th
of next month. Greece is in dire need of the over $170 billion of
bailout money, failing to receive which it is likely to default on
debt leading to its exit from the euro. Since this would
adversely impact the entire global financial system, investors'
frenzy was justified.
However, the markets made a late-hour comeback as reports
suggested that Greek leaders have agreed to commit to the strict
measures by Wednesday. A Greek official was quoted as saying that
the political leaders are going to promise by Wednesday that they
would implement the austerity measures, event tough they entailed
deep spending cuts so that Greece can secure the next tranche of
financial aid.
Domestic data failed to spark any rally, as retail sales data
came in slower than expected. According to the Commerce Department:
"Advance estimates of U.S. retail and food services sales for
January, adjusted for seasonal variation and holiday and
trading-day differences, but not for price changes, were $401.4
billion, an increase of 0.4 percent (±0.5%)* from the previous
month and 5.8 percent (±0.7%) above January 2011". The 0.4%
expansion fell short of consensus estimates of 0.7%.
However, despite the slower-than-expected expansion, the retail
sector edged higher with the SPDR S&P Retail (
XRT
) increasing 0.8%. Interestingly, retail sales increased month on
month, and the data was being compared with that recorded in
December, the month of holiday sales. Among the retailers, J.C.
Penney Company, Inc. (NYSE:
JCP
), Priceline.com Inc (NASDAQ:
PCLN
), Ascena Retail Group Inc (NASDAQ:
ASNA
), Office Depot, Inc. (NYSE:
ODP
) gained 0.9%, 1.0%, 0.9% and 0.7%, respectively.
ASCENA RETAIL (
ASNA
): Free Stock Analysis Report
PENNEY (JC) INC (
JCP
): Free Stock Analysis Report
OFFICE DEPOT (
ODP
): Free Stock Analysis Report
PRICELINE.COM (
PCLN
): Free Stock Analysis Report
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