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Markets hovered around break-even levels on Monday as encouragement from the energy sector balanced apprehensions over Greece’s debt negotiations. With no major economic data or earnings results from any bellwether coming to forefront, benchmarks took a pause a day ahead of Apple’s results.
The Dow Jones Industrial Average (DJI) dropped 0.1% to close the day at 12,708.82. The Standard & Poor 500 (S&P 500) was up 0.05% and settled almost unchanged at 1,316. The Nasdaq Composite Index edged down 0.09% and finished trading for the day at 2,784.17. The fear-gauge CBOE Volatility Index ended slightly higher at 18.67. On the New York Stock Exchange, NYSE Amex and Nasdaq, consolidated volumes were roughly 6.6 billion shares, almost flat compared to the daily average of 6.68 billion shares. For every couple of stocks that moved down on the NYSE, three stocks climbed higher.
The energy sector enjoyed decent gains yesterday and also prevented the benchmarks from closing lower. News about energy companies helped take the sector higher and the Energy SPDR Select Sector Fund (XLE) gained 0.8%. Energy major Chesapeake Energy Corporation (NYSE:CHK) said that in a bid to lift the prices, it would curtail the production of natural gas. Meanwhile, Apache Corporation (NYSE:APA) confirmed that it would takeover privately-held gas and oil company Cordillera Energy Partners III in a cash-and-stock deal worth $2.85 billion. Chesapeake and Apache gained 6.3% and 1.6%, respectively, and among other stocks, CONSOL Energy Inc. (NYSE:CNX), Cabot Oil & Gas Corporation (NYSE:COG) and Southwestern Energy Company (NYSE:SWN) added 3.4%, 6.5% and 10.3%, respectively.
Strength in the energy sector was helpful in negating the concerns about Greece’s debt negotiations. While reports suggested that Greek banks and investment houses, or the private creditors, were closing in on the country’s debt write-down deal, euro-zone ministers gathered in Brussels to work out the terms of payment of the second installment of the Greek bailout package. The debt write-down deal is an absolute pre-requisite for Greece to receive the $168 billion bailout package from the European Union (EU) and the International Monetary Fund (IMF). Greece is in dire need of the bailout fund, because if it fails to receive these funds, it will default on €14.5 billion of bonds that will mature in March.
Coming back to the domestic front, no major economic reports were released. Not much happening even on the earnings season front as no bellwether was scheduled to report their figures on Monday. However, investors will be on their toes as a host of major companies will be reporting their results this week. Tech-giant Apple Inc. (NASDAQ:AAPL) is scheduled to announce its results after the close of markets on Tuesday. Tech-majors like Microsoft Corporation (NASDAQ:MSFT), International Business Machines (NYSE:IBM) and Intel Corporation (NASDAQ:INTC) came out with encouraging results late last week, while results from Google Inc. (NASDAQ:GOOG) were disappointing. Investors now hope for better news from the iPhone and iPad maker.
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