US Stock Indexes Rally On Greek Optimism, Volume Light
$IBB, $CI, $AAPL, $AET, $HUM, $WMB, $ETE, $INTC, $QCOM
DJIA +1.7% YTD, NAS 100+8.8% YTD, S&P 500 +3.1% YTD, Russell 2000 +7.3% YTD
DJIA +103.83 at 18118.78, NAS 100 +36.97 at 5153.97, S&P 500 +12.86 at 2122.85
Volume: Trade was below average Monday, with about 700-M/shares changing hands on the NYSE
US stock indexes spent Monday in the Green, sentiment got a boost from reports indicating Greek officials submitted a new proposal to the Eurogroup, regional officials did not share the stock market’s optimism.
Germany’s FM Wolfgang Schaeuble saying he does not see anything new in the proposal. The Eurogroup met briefly Monday, setting the stage for an emergency Euro Summit that was called by European Council President Donald Tusk.
Monday’s developments pressured global bonds with Germany’s 10-yr Bund yield spiking 12 bpts to 0.88%.
The US 10-yr T-Note retreated on the day, sending its yield higher by 10 bpts to 2.36%.
Some of the cash outflow from the US Treasury market migrated to stocks as 9 of 10 stock sectors posted gains, as the rate-sensitive utilities stock sector (-0.1%) was pressured by the increase in yields.
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The healthcare stock sector (+0.8%) spent the day among the leaders on the strength in biotechnology and insurance names.
The iShares Nasdaq Biotechnology ETF (NYSEArca:IBB) 383.16, +5.68 gained 1.5%, Cigna (NYSE:CI) 162.65, +7.39, or + 4.8% after rejecting Anthem’s (NYSE:ANTM) 171.05, +5.99) offer at 184/share.
Also, Aetna (NYSE:AET 128.12, +4.05) offered to acquire Humana (NYSE:HUM) 189.94, -12.37) for an undisclosed amount.
On the cyclical side
3 of the 6 stock sectors: energy (+1.0%), financials (+0.8%), and technology (+0.7%) finished ahead of the broad market; energy was boosted by a 26.0% spike in the shares of Williams Companies (NYSE:WMB) 60.93, +12.59 after the company rejected an offer to merge with Energy Transfer Equity (NYSE:ETE) 65.06, -3.33 as part of an all-stock transaction valued at 64/share.
The technology stock sector received support from some of its largest components
Apple (NASDAQ:AAPL) 127.61, +1.01, Intel (NASDAQ:INTC) 32.26, +0.19, and Qualcomm (NASDAQ:QCOM) 67.36, +0.48) the 3 gained between 0.6% and 0.8%.
Economic data
Existing Home Sales increased 5.1% in May to 5.35-M SAAR from a revised 5.09-M from 5.04-M in April, consensus expected an increase to 5.26-M
- That was the most existing homes sold in 1 month since November 2009 when 5.44-M were sold
- Much of the gain came from an increase in 1st-time home buyers who accounted for 32% of all sales in May, up from 30% in April, representing the largest contribution since September 2012
Tuesday
May Durable Orders (consensus -0.5%) will be reported at 8:30a EDT, the FHFA Housing Price Index for April will be released at 9:00a EDT, and at 10:00a EDT comes May New Home Sales (consensus 525-K)
Stay tuned…
HeffX-LTN
Paul Ebeling
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