NEW YORK REPORT
INVESTORS brushed off Europe’s election results yesterday, as the S&P 500 rebounded from early losses to end nearly unchanged yesterday, despite the uncertainty surrounding the Eurozone’s ability to tackle its debt crisis.
US financial stocks, normally highly sensitive to events that could unsettle the Eurozone’s fiscal stability, were not only the biggest gainers, but had the heaviest volume.
The S&P 500 financial sector index rose 0.7 per cent. Bank of America shares shot up 2.8 per cent to £7.96 and Goldman Sachs gained one per cent to $110.04.
Homebuilders’ shares also advanced in yesterday’s session.
“One positive thing we are seeing out of the elections and we are hearing from the ECB chairman is a focus on growth and that austerity measures alone are not going to get them out of this crisis,” said Sean Lynch, global investment strategist for Wells Fargo Private Bank.
Analysts pointed to a potential government bailout for troubled Spanish bank Bankia as a boost for the sector.
The Dow Jones industrial average slipped 29.74 points, or 0.23 per cent, to 13,008.53 at the close. But the Standard & Poor’s 500 Index inched up just 0.48 of a point, or 0.04 per cent, to 1,369.58. The Nasdaq Composite Index added 1.42 points, or 0.05 per cent, to 2,957.76.
The election results from Europe initially roiled futures markets on Sunday night, but markets were able to rebound.
Cognizant Technologies Solutions slid 19.2 per cent as the biggest drag on the S&P 500, after cutting its profit and revenue outlooks.
PepsiCo climbed 1.1 per cent after Morgan Stanley raised the beverage firm’s rating to “overweight”.
Volume was 6.28bn shares on the New York Stock Exchange, the Nasdaq and the NYSE Amex, below the daily average of around 6.76bn.