Stocks Rise, Led by Banks; Pandora Slides
Stocks traded higher Thursday after a handful of mixed economic news and as investors snapped up beaten-down stocks following a selloff in the previous session over Greece's growing debt worries.
The Dow Jones Industrial Average climbed after skidding almost 1.5 percent in the previous session.
Home Depot and AmEx led the blue-chip gainers.
The S&P 500 and the tech-heavy Nasdaq were also higher. The CBOE Volatility Index, widely considered the best gauge of fear in the market, gained above 21. The Vix surged in the previous session to its highest level since mid-March.
Utilities, consumer staples and financials were the leaders among key S&P sectors.
“You have the euro bouncing off its lows and you have financials (the worst performers this year) coming back—with insurance stocks leading the way,” said Dave Rovelli, managing director of equity trading at Canaccord Genuity.
International lenders struggled to save Greece from default. Greek Prime Minister George Papandreou said he would reshuffle the government and would seek a confidence vote in parliament, responding to violent protests in Athens. Meanwhile, there was some chatter that China may provide some sort of European bailout. The Chinese Premier is scheduled to visit Europe later this month.
The euro moved slightly higher against the dollar after the greenback took a hit following a dismal report from the Philadelphia Fed.
Meanwhile, the main European banking regulator has told the European banks they need to stress the sovereign debt in their portfolios and financial institution debt in their portfolio, CNBC learned. The banks have six months to raise additional provisions.
Barclays and Deutsche Bank slipped following the news.
Citigroup said the hacker attack that breached some of its credit card data affected 360,000 customers, about twice as many as it had originally estimated.
Among techs, Pandora slipped below its $16 offering price on its second day of trading. Almost three-quarters of the 28 tech IPOs this year are down since their first day close.
Hewlett-Packard sued rival Oracle to force the world's No. 3 software maker to reverse its decision to discontinue the development on Intel's
On the earnings front, food producer Smithfield Foods gained after the nation's largest pork producer reported a better-than-expected profiton higher prices at its two key units, hog production and pork processing.
Kroger advanced after the grocery-store chain posted a higher-than-expected profit and boosted its full-year earnings forecast.
Meanwhile, Finisar sank after the network equipment maker forecast a dismal first quarter, hurt by a continued slowdown in demand from Chinese telecom equipment makers. Rivals JDSU and Ciena also tumbled following the news.
Research In Motion is slated to report earnings after-the-bell.
On the M&A front, Southern Union soared after it agreed to be acquired by rival Energy Transfer Equity for about $4.11 billion to create one of the largest U.S. natural gas pipeline operators.
Stocks were encouraged by a handful of better-than-expected economic news. Housing starts rose more than expected and permits for future construction touched a five month high in May, according to the Commerce Department.
Also, new applications for jobless benefits fell to 414,000 in the latest weekfrom an upwardly revised 430,000 in the week before.
However, markets turned briefly negative after news factory activity in the U.S. Mid-Atlantic region unexpectedly shrank to its lowest level since July 2009 from the month before, in another sign of weakness in the manufacturing sector, according to the Philadelphia Federal Reserve Bank.
And the U.S. current account deficit increased in the first quarter on strong imports, said the Commerce Department. The deficit represented 3.2 percent of U.S. gross domestic product, up from 3.0 percent in the fourth quarter.
European shares fell to head for their seventh consecutive weekly drop as worries about Greek's debt troubles worsened and investors feared contagion, reflected in Spain's debt auction.
On Tap This Week:
THURSDAY: Fed's Fisher speaks, money supply; Earnings from Research In Motion
FRIDAY: Consumer sentiment, leading indicators, quadruple witching
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