The market once again stayed focused on Greece’s financial woes, which is lumbering along with empty promises, lackluster concessions and stubbornness by all parties concerned: The Greek government, the International Monetary Fund, the European Commission, the European Central Bank, the president of France and German Chancellor Merkel. This saga will continue for at least another week as Greece will now put additional austerity demands by creditors to a national referendum on July 5th. To make matters worse, the Chinese market is in a free-fall despite monetary easing there to mitigate a slowing economy in that part of the world. Back home, the twists and turns of rising interest rates are taking their toll on bonds and income-related stocks. Utilities and REITS have been particularly hard hit, with few places to invest for dividend seekers caught between a rock and a crazy place. The Dow Industrial Average does not know where to go either lately, rising on Monday and Tuesday, selling off on Wednesday and Friday with a gain on Thursday, ending with a negative trading week of 0.4%. As did the S&P 500. The NASDAQ fell about twice as much, as semiconductor stocks were particularly hard hit. On a sector basis, healthcare shares did well on news of a favorable court ruling on Obamacare and a flurry of merger and acquisition speculation in the health insurance space. Telecom was the strongest sector, higher on average by about 1%, but virtually all other industry groups were lower, especially the utilities with a 2.4% reversal on the week. And transports were down by 2%, a somewhat troubling sign. Crude oil barely budged, leveling off at around $59.63/bbl. with energy shares lower by a fraction on average. If we can get past the Greek issue over the next week, second quarter earnings news will bring in a new wave of volatility, with Alcoa kicking off the season after the bell on July 8. This will be a holiday-shortened week with the markets closed on Friday. Enjoy the holiday.
Here is the answer to last week’s trivia question: On April 9 of what year did the Securities and Exchange Commission order all stocks to be traded in dollar decimals (e.g. 12.5 cents) vs. fractions of a point (1/8)? 2001, 1995, 2004 or 1989? Answer: 2001. The SEC, the federal agency that oversees the nation’s stock markets, ordered all U.S. stock markets to convert to decimals by April 9, 2001. The changeover began in August 2000, when the NYSE began trading seven stocks in decimals. The number was expanded to 57 companies in September. By February 2001, the stock in all the 3,025 companies listed on the NYSE at that time were traded in decimals, or pennies. Other exchanges then followed to comply.
Today’s Trivia Question: What is the largest food company in the world? Kraft Foods Group, PepsiCo, General Mills or Nestle?