Stock Market News for June 23, 2015 – Zacks Investment Research

Hopes of Greece and its creditors reaching a deal later this week helped benchmarks end higher on Monday. Greece has submitted new fiscal proposals to avert a default. Separately, the Nasdaq closed at an all-time high lifted by gains in biotech stocks.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article

The Dow Jones Industrial Average (DJI) gained 0.6% to close at 18,119.78. The Standard & Poor’s 500 (S&P 500) also advanced 0.6% to 2,122.85. The tech-laden Nasdaq Composite Index closed at 5,153.97; increasing 0.7%. The fear-gauge CBOE Volatility Index (VIX) declined 8.7% to settle at 12.74. A total of about 5.31 billion shares were traded on Monday, lower than this month’s average of 6.17 billion. Advancers outpaced declining stocks on the NYSE. For 58% stocks that advanced, 39% declined.

Jeroen Dijsselbloem, who chairs the Eurogroup of finance ministers, was optimistic about reaching a deal later this week after Greece submitted a new set of reform proposals to avoid the country from defaulting. The Greek government made fresh proposals which include higher taxes, welfare charges, steps to curb early retirement, additional pension reforms and tax increases to achieve budget surpluses as demanded by Greece’s lenders.

European Council President Donald Tusk, who chaired an emergency summit of leaders of the 19-nation currency bloc, said Greece’s new set of reform proposals were “a positive step forward”. Dijsselbloem added: “The first, general opinion of the institutions was that it is broad and comprehensive. They really need to look at the specifics to see whether it adds up in fiscal terms and whether the reforms are comprehensive enough for the economic recovery to take off again”.

Greece needs to make debt payments of $1.75 billion to the International Monetary Fund later this month. Lack of progress in Greek debt talks had raised fears among investors of a possible default by Greece and the country’s exit from the currency bloc. Uncertainty over Greece’s bailout program also led to daily deposit outflow of around one billion euros, which led the European Central Bank to increase the limit on emergency loans available to Greek banks.

Meanwhile, gains in biotech shares had a positive impact on the Nasdaq. Biotech stocks such as Gilead Sciences Inc. (GILD – Analyst Report), Biogen Inc. (BIIB – Analyst Report), Amgen Inc. (AMGN – Analyst Report) and Celgene Corporation (CELG – Analyst Report) increased 1.4%, 1.6%, 0.9% and 1.9%, respectively. The iShares Nasdaq Biotechnology (IBB) gained 1.5%, while the broader Health Care Select Sector SPDR (XLV) advanced 0.8%.

The Financial Select Sector SPDR (XLF) gained 1.5%, the highest among the S&P 500 sectors. Top holdings from the financial sector including Wells Fargo & Company (WFC – Analyst Report), JPMorgan Chase & Co. (JPM – Analyst Report), Bank of America Corporation (BAC – Analyst Report), Citigroup Inc. (C – Analyst Report) and The Goldman Sachs Group, Inc. (GS – Analyst Report) increased 1.5%, 1.3%, 1.8%, 1.3% and 1.6%, respectively.

Monday’s gains were broad based with 9 out of 10 sectors of the S&P 500 ending in the green. The utilities sector bucked the advancing trend and ended in the red. The Utilities Select Sector SPDR (XLU) declined 0.1%. Key utilities stocks including NextEra Energy Inc (NEE – Analyst Report), Exelon Corporation (EXC – Analyst Report), Southern Company (SO – Analyst Report) and Duke Energy Corporation (DUK) decreased 0.2%, 0.4%, 0.5% and 0.2%, respectively.

Coming to economic data, sales of existing homes increased at the fastest pace in May since Nov 2009. The National Association of Realtors reported existing home sales rose 5.1% to a seasonally adjusted annual rate of 5.35 million in May from April’s upwardly-revised figure of 5.09 million. This was also more than the consensus estimate of 5.26 million.

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Stock Market News for June 23, 2015 – Zacks Investment Research