This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at email@example.com or call 800-767-3771 ext. 9339.
Markets lost out on most of the day’s gains to end mostly flat following reports that Greece was considering exiting the euro. Benchmarks had been hovering at high levels all day long after an economic reading from National Association of Realtors buoyed sentiment. However, the final hour brought back age-old Greek concerns to the forefront and markets’ gains largely evaporated. As for the sectors, financials showed some strength while energy and materials were a drag on the indices.
The Dow Jones Industrial Average (DJI) edged down 0.01% to end just 1.67 points lower at 12,502.81. The Standard & Poor 500 (S&P 500) moved up by a negligible 0.05% or 0.64 points to finish yesterday’s trading session at 1,316.63. The tech-laden Nasdaq Composite dropped 0.3% and ended at 2,839.08. The fear-gauge CBOE Volatility Index (VIX) gained 2.1% and settled at 22.48. Consolidated volumes on the New York Stock Exchange, Nasdaq and the American Stock Exchange were roughly 7.25 billion shares, somewhat lower than last year's daily average of 7.84 billion. The advancers and the decliners had a relatively thin difference; as for 50% of the stocks that advanced on the NYSE, 47% stocks closed lower.
Benchmarks enjoyed smooth sailing almost through the entire trading session till the final hour. Markets encountered a volatile period during the closing hour as benchmarks dropped and again recouped most of their losses to end on a flat note. The Dow had moved up to 12, 575.96 at a point and in the final hours it lost out on all of its gains to hover around 50 points lower. Finally, a rebound at the final stage helped it to close almost unchanged. The S&P 500 too had moved up by 12 points during the day, before losing almost all of these gains. It was encouraging housing data that had lifted the mood earlier in the day. However, Greek concerns returned to the markets to wash away these gains later. Thus, markets failed to chalk up their second straight day of gains.
The National Association of Realtors reported an upside in existing-home sales in April, which also was on a higher note on a year-on-year basis. According to the report, total existing-home sales moved 3.4% higher to a seasonally adjusted annual rate of 4.62 million in last month, up from a downwardly revised 4.47 million reported in March. It also jumped a significant 10.0% from April 2011’s level of 4.20 million. Lawrence Yun, the chief economist of NAR, commented: “It is no longer just the investors who are taking advantage of high affordability conditions. A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices”.
The housing sector was most likely to benefit from this report and the PHLX Housing Sector (HGX) jumped 1.3%. Among the housing stocks, Toll Brothers Inc. (NYSE:TOL), Lennar Corp. (NYSE:LEN), PulteGroup, Inc. (NYSE:PHM) and KB Home (NYSE:KBH) jumped 1.8%, 2.2%, 2.5% and 3.2%, respectively. The financial sector also looked promising with The Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC) and Bank of America Corporation (NYSE:BAC) jumping 1.1%, 4.6%, 0.9% and 2.2%, respectively.
However, reports of former Greek Prime Minister Lucas Papademos telling Dow Jones Newswires that Greece was preparing for an euro exit dampened the sentiment in the final stages of the trading day. Concerns about Greece are not new and benchmarks have suffered enough of a battering due to them. Yesterday, the former prime minister said: "I share the view that if Greece defaults and exits the euro, the consequences for the euro zone—its financial system and real economy—will be profound and the associated cost will be significant and far-reaching. It will also affect the economies of other countries outside the euro zone". Sounding a reminder over the catastrophic consequences of such a decision, he said: "it cannot be excluded that preparations are being made to contain the potential consequences of a Greek euro exit".
The materials and energy sector were a drag on the markets. While Energy Select Sector SPDR (XLE) dropped 0.2%, the Materials Select Sector SPDR (XLB) was down 0.6%. As for energy shares, Halliburton Company (NYSE:HAL), Transocean Ltd. (NYSE:RIG) and Schlumberger Limited (NYSE:SLB) lost 1.3%, 0.9% and 0.5%, respectively. Materials components including Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), E. I. du Pont de Nemours and Company (NYSE:DD) and Agrium Inc. (NYSE:AGU) were down 1.3%, 0.6% and 1.7%, respectively.