MARKETS AT A GLANCEU.S. stocks fell, gold prices held steady and Treasury bonds rallied amid concerns over Greece's sovereign debt crisis. Oil prices fell as the U.S. dollar ticked higher.
(Data as of approximately 5 p.m. ET)
LAST CHANGE % CHG
DJIA 18015.95 -99.89 -0.55%
Nasdaq 5117.00 -15.95 -0.31%
S&P 500 2109.99 -11.25 -0.53%
Japan: Nikkei 225 20174.24 183.42 0.92%
Hang Seng 26760.53 65.87 0.25%
Shanghai Composite 4478.36 -306.99 -6.42%
S&P BSE Sensex 27316.17 200.34 0.74%
Australia: S&P/ASX 5597.00 72.10 1.31%
UK: FTSE 100 6710.45 2.57 0.04%
PRICE CHG YIELD%
U.S. 2 Year 1/32 0.621
U.S. 5 Year 8/32 1.573
U.S. 10 Year 21/32 2.260
Australia 10 Year -9/32 2.893
China 10 Year -8/32 3.640
India 10 Year 0/32 7.878
Japan 10 Year 6/32 0.418
German 10 Year 16/32 0.758
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.7768 -0.0032
Yen (USD/JPY) 122.70 -0.26
S. Korean Won (USD/KRW) 1103.20 -2.38
Chinese Yuan (USD/CNY) 6.2098 0.0008
Euro (EUR/USD) 1.1352 -0.0010
WSJ Dollar Index 85.64 0.02
LAST CHANGE % CHG
Crude Oil 59.45 -1.00 -1.65%
Brent Crude 63.62 -1.37 -2.11%
Gold 1199.9 -2.1 -0.17%
SNAPSHOT:
Housing in the U.S. remains a focus of economy-watchers and Federal Reserve policy makers. U.S. home construction has moved in fits and starts as builders wait for demand to rev up. Two reports on May home sales are on tap. Monday, the National Association of Realtors reports on sales of existing homes and Tuesday the Commerce Department releases numbers on new-home sales. Economists surveyed by The Wall Street Journal expect increases in each housing segment. Solid sales gains in both new and existing homes would be a plus for the economic outlook. One catalyst for buying this spring: The recent rise in mortgage rates might have pushed hesitant buyers to sign on the dotted line before rates increase further.
U.S. stocks ended lower, but the Dow industrials and S&P 500 notched a second straight week of gains.
For the week, the Dow rose 0.6% and the S&P 500 added 0.7%. The Nasdaq gained 1.3% in the same period, marking its first weekly gain in a month. A surge in biotechnology shares on Thursday propelled the Nasdaq to a record close, its first since late May.
Greece's debt negotiations and updates on U.S. monetary policy drove action in markets this week, rather than news about individual companies.
"For the most part, we still are in an environment where there are these large, thematic risk-on versus risk-off debates when you see interest-rate concerns or macroeconomic issues like Greece," said Rob Bernstone, managing director of equity trading at Credit Suisse.
The Federal Reserve this week continued to signal that it would take a slow approach to raising interest rates. The Fed's message reassured stock investors, who have enjoyed six years of a bull market in a low-rate environment. San Francisco Fed President John Williams said the central bank should raise interest rates twice this year.
Shares of financial companies in the S&P 500 were among the worst performers , down 1%. Those stocks tend to be sensitive to the interest-rate outlook, as banks can make more money from loans in a higher interest-rate environment.
News about Greece continued to grab investors' attention. The European Central Bank raised emergency lending for Greek banks, reacting to a quickening pace of deposit withdrawals as bailout talks stall.
In corporate news, Hershey Co. lowered its sales and earnings targets for the year and announced plans to cut about 300 jobs. Shares slipped 3.5%.
Jana Partners LLC on Thursday disclosed a nearly 7.2% stake in ConAgra Foods Inc. and said it was seeking to change the company's board of directors. ConAgra shares jumped 11%.
China shares suffered their worst week in more than seven years on Friday, as both the Shanghai and Shenzhen markets fell into correction territory amid rising fears of a bubble in China's volatile equity markets.
FOREX:
The dollar fell against the euro and the yen this week as investors pushed back their expectations for higher U.S. borrowing costs and played down risks associated with the debt crisis in Greece.
But major currencies remain in tight ranges due to the increased uncertainty over the Federal Reserve's timeline for raising interest rates and over the negotiations between Greece and its creditors in Europe.
The dollar failed to gain traction against rivals this week as more investors grew unsure, following the Fed's policy statement on Wednesday, about when U.S. interest rates would rise. The central bank lowered expectations for growth for the rest of the year and its interest-rate projections for 2016 and 2017.
"There's still so much uncertainty in the market surrounding U.S. interest rates, and there's a big focus on economic projections, which were revised down," said Sireen Harajli, foreign exchange strategist at Mizuho Bank. "There isn't a lot of confidence in the dollar right now."
Investors have been pushing back their expectations to the end of this year or early 2016 for the Fed's first interest-rate increase since 2006. Higher U.S. borrowing costs would draw investors to the dollar as it would boost assets denominated in the currency.
Federal-funds futures, which traders and investors use to wager on Fed policies, show that investors see a 52% chance of a rate increase in December and just a 17% chance in September. One week ago, there was a 69% probability in December and a 30% chance in September, according to CME Group.
Adding to the dollar's struggles, investors haven't been selling euros as protection against the possibility of a Greek debt default. The risk of Greece defaulting on its loan repayments to international creditors and potentially exiting the eurozone could prove extremely destabilizing to euro-area assets and the common currency, investors said.
"The impasse is not causing market panic as investors seem to be willing to wait until June 30, when the extended bailout expires and the bundled [International Monetary Fund] payments are due," Credit Agricole wrote in a research note.
U.S. Treasury bonds rallied and capped the biggest one-week price gain in three months as worries over Greece's debt crisis stoked demand for haven assets.
"There is a sense of unease in the markets as the clock continues to tick down to the approaching deadline for Greece to strike a deal to avoid a debt default," said Millan Mulraine, deputy head of U.S. research and strategy at TD Securities in New York.
The bond market is stabilizing after a weekslong selloff driven by signs of improving economic outlook in the U.S. and eurozone and valuations concerns.
The Fed's latest signal Wednesday that it would be slow to raise interest rates also drew money managers to buy Treasury bonds. These investors believe the central bank's gradual approach would keep a lid on bond yields.
Eurozone leaders will try to clinch a deal at an emergency summit Monday, after finance ministers failed again to bridge the gap between Athens and its international creditors. The summit comes just eight days before Greece's eurozone rescue fund runs out.
Without a deal, Greece would be forced to default on its debt payment and potentially depart the eurozone. Investors and analysts say this could threaten the financial stability in the eurozone and generate ripples into global markets.
"Treasurys are catching a bid ahead of the weekend," said Sean Simko, head of fixed-income management at SEI Investments, which has $258 billion assets under management. "Concerns around Greece should drive flows as negotiators are quickly running out of time to strike a deal."
Many investors say they still expect Greece and its lenders to reach an agreement despite the hardball tactics in negotiations given the potential broad impact. The European Central Bank stepped in and eased the eurozone's sovereign debt crisis in 2012, the last time worries heightened over Greece potentially bolting out of the currency bloc.
Analysts and traders say the uncertainty over Greece is one of the reasons for the Fed to hold a cautious stance in shifting to higher interest rates. The Fed signaled from its monetary-policy meeting Wednesday that the pace of tightening would be slower than it projected in March.
Oil prices fell on the firming U.S. dollar as investors tracked the latest twists in the Greek debt negotiations and braced themselves for the looming deadline in the Iran nuclear talks.
Oil markets followed a common recent pattern of taking cues from moves of the dollar, even largely ignoring an updated count on the amount of oil drilling in the U.S., analysts said.
The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, spent most of the session in positive territory. Oil is priced in dollars and becomes more expensive for holders of other currencies as the greenback appreciates. The dollar fell back to unchanged in the afternoon, and oil subsequently pared losses that had briefly pushed U.S. oil below $59 a barrel.
(MORE TO FOLLOW) Dow Jones Newswires
June 21, 2015 17:45 ET (21:45 GMT)
New data showed the U.S. oil-rig count fell by four to 631 in the latest week, according to Baker Hughes Inc., marking the 28th straight week of declines. The number of working U.S. oil rigs, a proxy for drilling and production, has fallen about 61% since its peak in October.
TODAY'S HEADLINES:
Cigna Rejects Anthem Takeover Bid
The small cutback reaffirms a trend suggesting the most dramatic cutbacks are past, said John Saucer, vice president of research and analysis at Mobius Risk Group in Houston. But that wasn't enough to jolt prices, he added.
Analysts have said that the currency markets are too volatile for their run as the big driver of oil prices to end soon. There will likely at least need to be a deal over Greek debt for things to change, they have said.
In the precious metals market, gold prices held steady as pressure from a stronger dollar was offset by demand from traders looking to protect themselves from the risk of a sovereign debt default by Greece.
Cigna Corp.'s board of directors has rejected a $47.5 billion takeover offer from Anthem Inc., saying in a letter Sunday they were "deeply disappointed" in Anthem's actions.
European leaders' talks on Monday could determine whether Greece seals a last-gasp deal or ends up under capital controls. The pressure is intense but the hurdles remain formidable.
Altice SA has offered about EUR10 billion, or roughly $11.4 billion, to buy French mobile operator Bouygues Telecom, according to people familiar with the matter.
The ECB increased emergency lending for Greek banks as deposit flight mounted amid Greece's deadlock with lenders.
Hong Kong's stock exchange said it is planning to launch a second round of market consultations on whether to allow dual-class shares and other weighted voting structures, after a preliminary review of the idea yielded mixed responses in the wake of Alibaba Group's New York listing.
The EU demanded sweeping changes to the way Google ranks rival comparison-shopping services in its general search results.
EBay said it has sold back to Craigslist the 28% stake it has held in the classified marketplace since 2004.
The Obama administration proposed new standards for big trucks aimed at lowering fuel costs and cutting carbon emissions.
Teva Pharmaceutical said it has taken a 4.61% stake in Mylan, an amount that gives Teva standing in the Dutch Enterprise Chamber to commence a takeover if necessary.
After a judge found the practice anticompetitive, American Express is lifting its restrictions on merchants who accept its cards from steering customers to other brands.
China has signed up to design a high-speed railway between the Russian cities of Moscow and Kazan, one of the first concrete examples of new business with China Russian officials have pursued since falling out with the West.
Russia's state oil giant OAO Rosneft sold a minority stake in an eastern Siberian oil-and-gas field to BP PLC for $750 million and bought a stake in a German refinery from France's Total SA, underscoring the limitation of Western sanctions that have targeted Rosneft and its chief executive, a key ally of President Vladimir Putin.
The IMF sent a message of support for Ukraine's government, which is seeking to restructure its debt while facing an economic slide and military conflict in the east
Shanghai Stocks Offer Little Fuel for China's Economy
Investos Debate the End of the Health-Care Stock Surge
Aetna Makes Takeover Proposal to Humana -- Sources
Anthem Bids $184 a Share in Cash and Stock for Cigna
Auto Parts Maker Gestamp to Open U.S. Facility to Supply Volkswagen
Uber Finalizing $2 Billion Line of Credit
Ukraine Offers Additional Bonds if Creditors Accept Haircut
Gap Deserves to Come Off Discount Rack
The Oil Industry's Magic Printing Press
Use REITs to Invest Like a Property Mogul
(END) Dow Jones Newswires
June 21, 2015 17:45 ET (21:45 GMT)
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