Stock Market News for June 15, 2015 – Zacks Investment Research
Benchmarks ended the last trading day of the week in the red following a deadlock between Greece and its creditors over the country’s bailout program. Positive consumer sentiment data also raised anxiety about a possible hike in interest rates sooner than later. For the week, the S&P 500 and the Dow ended in the green, while the Nasdaq finished in negative territory.
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The Dow Jones Industrial Average (DJI) declined 0.8% to close at 17,898.84. The Standard & Poor’s 500 (S&P 500) decreased 0.7% to 2,094.11. The tech-laden Nasdaq Composite Index closed at 5,051.10; decreasing 0.6%. The fear-gauge CBOE Volatility Index (VIX) surged 7.2% to settle at 13.78. A total of about 5 billion shares were traded on Friday, lower than this month’s average of 6.1 billion. Decliners outpaced advancing stocks on the NYSE. For 62% stocks that declined, 34% advanced.
Benchmarks ended lower on Friday following a setback in Greek debt talks. The standoff between Greece and its creditors intensified after the International Monetary Fund (IMF) quit talks on Thursday, citing insufficient progress over the country’s bailout program.
Delegates from IMF left for Washington from Brussels because of “major differences” between Greece and its creditors in most key areas. Further, IMF spokesman Gerry Rice said: “There has been no progress in narrowing these differences recently, and thus we are well away from an agreement.” However, the IMF said the Fund still remains “fully engaged” with Athens.
Greece needs to pay about 1.5 billion euros this month to the IMF. Greece faces the threat of going bankrupt provided there is no deal by the end of this month. Senior officials from all 19 Eurozone countries discussed the possibility of a Greek default and the country’s exit from Eurozone. Eurozone officials discussed a “plan B” to bailout Greece from its financial crisis. However, no deal was reached resulting in “a very high probability of default” by Greece within the stipulated time frame.
Meanwhile on the domestic front, upbeat data on consumer sentiment indicated the economy was on a solid footing. However, it raised concerns among investors of a possible hike in borrowing costs sooner than later. The University of Michigan and Thomson Reuters’ preliminary reading of consumer sentiment was at 94.6 in June. This was more than the consensus forecast of an increase to 91.2.
Separately, the U.S. Department of Labor reported that Producer Price Index (PPI) gained 0.5% in May, more than the consensus estimate of an increase by 0.4%. The core PPI increased 0.1% in May, in line with the consensus estimate.
Friday’s losses were broad based, with 9 out of 10 sectors of the S&P 500 ending in the red. The Health Care Select Sector SPDR (XLV) declined 1.2%, the highest among the S&P 500 sectors. Shares of healthcare stocks such as Amgen Inc. (AMGN – Analyst Report), Gilead Sciences Inc. (GILD – Analyst Report), Bristol-Myers Squibb Company (BMY – Analyst Report), Pfizer Inc. (PFE – Analyst Report) and Johnson & Johnson (JNJ – Analyst Report) decreased 1.2%, 1.2%, 0.9%, 0.7% and 0.9%, respectively.
The Energy Select Sector SPDR (XLE) dropped 1.4% and was the second biggest decliner among the S&P 500 sectors. Energy shares fell due to drop in oil prices. The prices of WTI crude oil and Brent crude oil decreased 1.4% and 1.9% to $59.96 per barrel and $63.87 a barrel, respectively. Oil prices took a beating over continuing concerns about abundant oil supply.
Dow components Exxon Mobil Corporation (XOM – Analyst Report) and Chevron Corporation (CVX – Analyst Report) declined 1.3% and 1.2%, respectively. Other key stocks from the energy sector including Schlumberger Limited (SLB – Analyst Report), ConocoPhillips (COP – Analyst Report) and Transocean Ltd. (RIG – Analyst Report) decreased 0.6%, 0.8% and 1.9%, respectively.
The S&P 500 advanced a meager 0.06% for the week, while the Dow gained 0.3%. On the other hand, the Nasdaq declined 0.3%. Benchmarks ended mostly in the green for the week after encouraging retails sales data indicated consumer spending is picking up. Additionally, gains in consumer staples and financial shares had a positive impact on the S&P 500.
However, the gains were limited due to the IMF halting negotiations with Greece over the country’s bailout program. Separately, the Nasdaq finished in negative territory dragged down by declines in biotech stocks. Drop in airline stocks also weighed on the broader markets, with the Dow Jones Transportation Average nearing correction territory on Tuesday.
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Stock Market News for June 15, 2015 – Zacks Investment Research
