Benchmarks ended in the red on Monday as investors were concerned about Greece's debt crisis, while China's rate cut to lift its economy did little to boost sentiment. Meanwhile, energy shares took a beating due to drop in oil prices . Yesterday's total composite trading volume turned out to be the fifth lowest for this year.
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The Dow Jones Industrial Average (DJI) declined 0.5% to close at 18,105.17. The Standard & Poor's 500 (S&P 500) also decreased 0.5% to 2,105.33. The tech-laden Nasdaq Composite Index closed at 4,993.57; declining 0.2%. The fear-gauge CBOE Volatility Index (VIX) climbed 7.7% to settle at 13.85. A total of about 5.6 billion shares were traded on Monday, lower than the last five trading days' average of 6.8 billion. Decliners outpaced advancing stocks on the NYSE. For 63% stocks that declined, 34% advanced.
Benchmarks finished the first trading session of the week in negative territory as investors remained concerned about Greek debt crisis. Greece has been able to pay its debt of about 750 million euros to the International Monetary Fund. Eurozone finance ministers welcomed Greece's progress in negotiating with its creditors for a cash-for-reform deal. However, they believe more needs to done to bridge the differences in order to make a comprehensive bailout agreement. Investors took a pessimistic view on this progress as their expectations that the anti-austerity Greek government and its lenders will agree on a comprehensive reform program remained very low.
Meanwhile, the People's Bank of China trimmed its benchmark lending and deposit rates for the third time in six months. China's central bank stepped up its monetary measures to provide stimulus to China's slow economic growth. The apex bank trimmed both its one-year loan rate and one-year deposit rate by a quarter-percentage point to 5.1% and 2.25%, respectively. It also gave more flexibility to Chinese banks on deciding how much they pay depositors. Banks are allowed to raise one-year deposit rates to a maximum of 3.375%. However, China's move to boost its fragile economy failed to impress investors.
Yesterday's losses were broad based with 9 out of 10 sectors of the S&P 500 ending in the red. The Energy Select Sector SPDR (XLE) fell 1.9%, the highest among the S&P 500 sectors. Energy shares fell due to drop in oil prices. Oil prices dropped on concerns about oversupply as petroleum drilling picked up in some areas. WTI crude oil dropped 0.2% to $59.25 per barrel. Additionally, Brent crude oil decreased 0.7% to $64.91 per barrel.
Dow components Exxon Mobil Corporation ( XOM ) and Chevron Corporation ( CVX ) dropped 1.7% and 1.2%, respectively. Among other key stocks from the energy sector, Kinder Morgan, Inc. ( KMI ), Schlumberger Limited ( SLB ) and ConocoPhillips ( COP ) decreased 0.9%, 0.7% and 2.8%, respectively.
The Utilities Select Sector SPDR (XLU) declined 0.7% and was the second biggest loser among the S&P 500 sectors. Key utilities stocks including Dominion Resources, Inc. ( D ), NextEra Energy Inc ( NEE ), Exelon Corporation ( EXC ), Southern Company ( SO ) and PG&E Corporation ( PCG ) decreased 1.1%, 1.2%, 1.6%, 1.3% and 0.7%, respectively.
Separately, Apple Inc. ( AAPL ) was the biggest drag on the Nasdaq. Shares of Apple dropped 1% after the company's smartphone shipments in China reduced for the first time in six years.
In deal news, Noble Energy, Inc. ( NBL ) said it will acquire Rosetta Resources, Inc. ( ROSE ) for about $2 billion. While shares of Noble Energy declined 6.2%, Rosetta Resources' shares surged 27.2%.
Among earnings news, Dean Foods Company ( DF ) reported first quarter earnings per share of 24 cents, beating the Zacks Consensus Estimate of 17 cents. Actavis plc ( ACT ) also posted first quarter earnings per share of $4.30 that came ahead of the Zacks Consensus Estimate of $3.84. Dish Network Corp. ( DISH ) too reported first quarter earnings per share of 76 cents that surpassed the Zacks Consensus Estimate of 41 cents.
While, shares of Dean Foods and Actavis gained 6.5% and 3.1%, respectively, Dish Network's shares declined 0.7%.
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