Favorable results from the Greek elections failed to boost the
markets through Monday's session, as concerns over Spain's
borrowing costs overshadowed sentiments and benchmarks ended mixed.
The technology sector nonetheless enjoyed a decent rally and that
helped the Nasdaq end sufficiently higher. But the S&P 500
managed only meager gains and the Dow was left languishing in the
red.
The Dow Jones Industrial Average (DJI) halted its two-day
winning rally and dropped 0.2% to end at 12,741.82. The Standard
& Poor 500 (S&P 500) edged up 0.1% and settled slightly
higher at 1,344.78. The tech-laden Nasdaq Composite Index jumped
0.8% to finish yesterday's trading session at 2,895.33. The
fear-gauge CBOE Volatility Index (VIX) slumped 13.2% and declined
sharply to 18.32. Consolidated volumes on the New York Stock
Exchange, the American Stock Exchange and Nasdaq were roughly 5.78
billion shares, lower than last year's daily average of 7.84
billion. The advancers outnumbered the declining stocks on the
NYSE; as for 57% of stocks that gained, 40% stocks traded
lower.
Markets opened on Monday after pro-bailout parties won the
crucial Greece election over the weekend. With anti-bailout SYRIZA
party not getting a majority, fears of Greek's immediate exit from
the euro subsided for the moment. However, while some focused on
news of pro-bailout parties winning the election, the larger
concern was that the New Democracy party had just managed only a
narrow victory and the anti-bailout party did garner a large chunk
of votes. The New Democracy party will now have to woo other
parties and form a significant majority. Investors across the globe
have been jittery about Greece elections, since Greece's chances of
surviving within the currency union depended on it. Meanwhile,
Antonis Samaras, leader of New Democracy, said while he was
steadfast on the bailout package, there is need for some necessary
amendments.
Thus, concerns continue to linger and investors can hardly take
long-term comfort from these results. Their attention also turned
to another Euro member, Spain. Spain has been struggling with
higher borrowing costs over the past several days and had been
approaching the 'unsustainable' 7% mark. This time, the 10-year
bond yields of Spain did finally cross the 7% mark as it soared as
high as 7.18%. It was the new euro-era high for Spain's bond-yield,
but what was more jittery was that nations including Greece,
Ireland and Portugal had to seek a bailout when there bond yields
crossed the 7% 'unsustainable' mark. Things are not comfortable
either in Italy and Cyprus.
Thus, cross-Atlantic tensions lingered on to dampen sentiments
yet again. The financial sector is susceptible to developments on
these fronts, and yesterday the Financial Select Sector SPDR (XLF)
dropped 0.6%. Among financial stocks, Bank of America Corporation
(NYSE:
BAC
), Citigroup, Inc. (NYSE:
C
), The Goldman Sachs Group, Inc. (NYSE:
GS
), Morgan Stanley (NYSE:
MS
) and UBS AG (NYSE:
UBS
) slumped 1.8%, 2.7%, 2.1%, 3.4% and 2.0%, respectively.
However, the technology sector had a strong run yesterday mostly
buoyed up by Facebook, Inc. (NASDAQ:
FB
) and Groupon, Inc. (NASDAQ:
GRPN
), which jumped 4.7% and 10.8%, respectively. While the Technology
Select Sector SPDR (XLK) jumped 0.7%, and stocks including Apple
Inc. (NASDAQ:
AAPL
), Google Inc. (NASDAQ:
GOOG
), NVIDIA Corporation (NASDAQ:
NVDA
) and Broadcom Corp. (NASDAQ:
BRCM
) gained 2.0%, 1.1%, 0.9% and 1.1%, respectively. Gains in tech
sector were instrumental in guiding the Nasdaq index to the
positive zone.
Therefore, investors yesterday remained on the edge, as they
await crucial meetings this week. The Group of 20 is due to meet
soon and investors will be keenly watching their every move,
particularly on the euro-zone debt situation. Also, the Federal
Open Market Committee will meet this week, and investors are
expecting some announcement regarding monetary policy.
APPLE INC (AAPL): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis
Report
BROADCOM CORP-A (BRCM): Free Stock Analysis
Report
CITIGROUP INC (C): Free Stock Analysis Report
FACEBOOK INC-A (FB): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis
Report
GROUPON INC (GRPN): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
NVIDIA CORP (NVDA): Free Stock Analysis Report
UBS AG (UBS): Free Stock Analysis Report
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