Stocks Rise Ahead of Greece Vote; Oil Slips
Stocks climbed Monday, reversing three days of losses, as investors snapped up beaten-down stocks and bet there would be a near-term resolution to Greece's financial future.
The Dow Jones Industrial Average gained, led by BofA and Microsoft , after ending lower last weekamid continuing jitters over the euro zone debt crisis.
The S&P 500 and the tech-heavy Nasdaq were higher. The CBOE Volatility Index, widely considered the best gauge of fear in the market, slipped below 21.
Financials and utilities were the biggest gainers among the S&P sectors, while materials lagged.
The Greek parliament was debating a fresh austerity package but the government is fragile and analysts fear that it may not pass. The euro slipped against the dollarahead of the vote.
Meanwhile, regulators proposed higher tier one capital ratios for big and systemically important banks over the weekend.
Rochdale Securities vice president for equity research Dick Bove wrote in a market note that the new proposals, if enacted, might trigger a global recession as banks would cut down on lending even more.
In a separate note, Bove said BofA stock is "massively undervalued."
Rivals Citigroup , GoldmanSachs and Morgan Stanley were higher. Despite the day's rally, the sector is still the worst performer in 2011.
The Bank for International Settlements said interest rates must rise in order to fight global inflation and that delays in cutting budget deficits may make the sovereign crisis even worse.
Oil prices dippedwith U.S. light, sweet crude near $90 a barrel and London Brent crude below $105.
Among techs, Microsoft rose ahead of an anticipated release of a version of the software giant's Office that is accessible via the Internet.
Cisco gained even after the tech bellwether was cut to "neutral" from "outperform" by Cowen.
LDK Solar jumped after the Chinese solar company said it plans to buy back up to $100 million of its undervalued American Depository shares (ADSs).
Disney gained even after Nomura cut its price target on the media conglomerate to $45 from $47.
Target slipped after Janney Capital cut its rating on the retailer to "neutral" from "buy."
GSV Capital jumped after the investment fund said it has taken a small stake in Facebook that values the world's No. 1 social networking site at about $70 billion.
In M&A news, Continucare skyrocketed more than 30 percent after Metropolitan Health Networks offered by acquire the health care firm for about $416 million.
And LeapFrog gained after the CEO of the educational toy maker said the firm is open to the idea of being acquired.
And in earnings, Nike is slated to report after-the-bell.
The government is slated to auction $35 billion in 2-year notes at 1pm ET. Auctions of 5-year notes and 7-year notes are expected Tuesday and Wednesday, respectively.
President Obama is due to meet Senate leaders to discuss about raising the U.S. debt ceiling, with an August 2 deadline approaching.
On the economic front, consumer spending was largely unchanged in May for the first time in almost a year, according to the Commerce Department. The flat reading in consumer spending came after 10 straight months of gains and followed a downwardly revised 0.3 percent gain in April. Economists had expected spending to gain 0.1 percent, according to a Reuters poll.
When adjusted for inflation, spending fell 0.1 percent in May, declining for a second straight month. Spending on durable goods fell 1.5 percent after being flat in April.
European shares ended higher, after falling for eight straight weeks, amid hopes of a solution to Greece's debt problem.
On Tap This Week:
MONDAY: Fed's Hoenig speaks, 2-yr note auction; Earnings from Nike
TUESDAY: S&P Case-Shiller home price index, consumer confidence, 5-yr note auction, IMF board to select new chief
WEDNESDAY: Weekly mortgage apps, pending home sales index, oil inventories, 7-yr note auction, farm prices, Dell analyst meeting, Fed meeting on card fees; Earnings from Family Dollar, General Mills, KB Home, Monsanto
THURSDAY: Weekly jobless claims, Fed's Bullard speaks, Chicago PMI, End of QE2, Marathon Oil split takes place
FRIDAY: Consumer sentiment, ISM mfg index, construction spending, Biden's deadline for deficit plan, HP launches TouchPad, auto sales
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