Wall St closes up on weak volumes
US stocks rose yesterday, as the latest development to reduce Greece’s debt helped draw buyers and the S&P 500 touched a key support level, but anaemic volume signalled the recent weakness may not be over.
Stocks erased early losses as the S&P 500 dipped toward 1,259.78, its 200-day moving average, which is often viewed as a pivotal point in determining the market’s direction. A drop below that level would be the first since September 2010.
“When you’re in the midst of a bullish trend since July of last year – that’s when the bottom was – I think people tend to look for places to buy dips, and this is just an obvious place to expect some buying to come into the market,” said John Kosar, director of research at Asbury Research in Chicago.
The moves higher may have been slightly exaggerated due to thin volume. Just 5.66bn shares traded on the New York, Nasdaq and NYSE Amex exchanges, compared with a daily average of 7.58bn.
Eurozone finance ministers gave Greece two weeks from yesterday to approve stricter austerity measures in return for another €12bn in emergency loans, piling pressure on Athens to get its ragged finances in order.
The Eurozone finance ministers expect the money, the next tranche in a €110bn bailout of Greece by the European Union and the International Monetary Fund, to be paid by mid-July. Greece needs the loans by then to avoid a debt default.
Despite the development, financials were the S&P 500’s weakest sector. Shares declined after Citigroup cut price targets on a number of banks, including Goldman Sachs, citing a tough regulatory environment. Goldman’s shares slipped 1.5 per cent to $135.14, while Morgan Stanley shares dropped 1.9 per cent to $22.39.
The Dow Jones industrial average climbed 76.02 points, or 0.63 per cent, to end at 12,080.38. The Standard & Poor’s 500 Index rose 6.86 points, or 0.54 per cent, to 1,278.36. The Nasdaq Composite Index gained 13.18 points, or 0.50 per cent, to 2,629.66 at the close.
The US Food and Drug Administration approved a tamper-resistant pain drug from Pfizer and Acura Pharmaceuticals. Acura shares jumped 16.3 per cent to $4.50, while shares of Pfizer rose 0.05 per cent to $20.27.
In the consumer discretionary sector, which was also among the top-performing groups, Wal-Mart Stores gained 0.4 per cent to $53.04.