MARKETS AT A GLANCE
LAST CHANGE % CHG
DJIA 17757.9 138.4 0.79%
Nasdaq 5013.12 26.26 0.53%
S&P 500 2077.42 14.31 0.69%
Japan: Nikkei 225 20329.3 93.59 0.46%
Hang Seng 26250 283.05 1.09%
Shanghai Composite 4053.7 -223.52 -5.23%
S&P BSE Sensex 28020.9 240.04 0.86%
Australia: S&P/ASX 5515.7 56.7 1.04%
UK: FTSE 100 6608.59 87.61 1.34%
PRICE CHG YIELD %
U.S. 2 Year -3/32 0.692
U.S. 5 Year -9/32 1.707
U.S. 10 Year -18/32 2.424
Australia 10 Year -1/32 3.024
China 10 Year -5/32 3.66
India 10 Year -1/32 7.996
Japan 10 Year -8/32 0.481
German 10 Year -13/32 0.814
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.7644 -0.0002
Yen (USD/JPY) 123.16 -0.01
S. Korean Won (USD/KRW) 1125.22 0.01
Chinese Yuan (USD/CNY) 6.2012 0.0007
Euro (EUR/USD) 1.1054 0
WSJ Dollar Index 87.18 0
LAST CHANGE % CHG
Crude Oil 56.86 -2.61 -4.39%
Brent Crude 62.46 -1.68 -2.62%
Gold 1167.8 -4 -0.34%
(Data as of approximately 5 p.m. ET)
SNAPSHOT:
U.S. stock prices rose as investors appeared reassured by signs that Greece and its creditors have a willingness to negotiate. U.S. government bonds sold off, gold prices fell and the dollar strengthened on positive U.S. economic reports. Oil prices skidded after a government report showed a continuing supply glut.
OPENING CALL:
Investors in China are likely to gird for another volatile trading session after the Shanghai Composite Index fell 5.2% in the previous session. China's stock market continues to transmit signals that, instead of strengthening the country's economic structure, it is sowing new risks as it gets larger. Authorities including China's central bank have scrambled to respond in recent days as its wild swings threaten havoc for the financial system. Elsewhere in Asia, Australia is expected to report a May trade deficit of $2.2 billion Australian dollars. April's deficit more than tripled to $3.9 billion Australian dollars -- the country's largest monthly trade deficit on record -- as the value of resource exports fell, sharply eclipsing a rise in imports of capital goods
EQUITIES:
U.S. stocks rose, as the back-and-forth between Greece and its creditors fueled hopes about a possible deal.
The twists and turns in Greece's financial situation continued to drive stocks. As in recent days, the moves were driven short-term investors such as hedge funds, rather than longer-term investors making bets on individual stocks, traders said.
A fresh bailout proposal from Greek Prime Minister Alexis Tsipras cheered investors, even though the proposal was subsequently dismissed by European officials as insufficient to revive negotiations.
"We're not getting a lot of company news right now that might shift this focus away from some of these political headlines," said Jack Caffrey, equity portfolio manager at J.P. Morgan Private Bank.
Meanwhile, a deal between two insurance companies, the largest to date, also added to the positive tone. ACE Ltd. agreed to buy fellow property-and-casualty insurer Chubb Corp. for $28.3 billion in cash and stock. ACE shares rose 0.8%, while those of Chubb jumped 26%.
Financial stocks rose the most in the S&P 500, up 1.3%. Shares of Travelers Cos. rose 2.7%, leading the Dow higher.
Economic reports were upbeat.
Private payrolls in the U.S. increased by 237,000 jobs in June, according to the national employment report compiled by payroll processor Automatic Data Processing Inc. and forecasting firm Moody's Analytics. Economists surveyed by The Wall Street Journal expected an increase of 220,000 jobs.
U.S. manufacturers are revving up activity, according to a survey released on Wednesday by the Institute for Supply Management. The ISM's manufacturing purchasing managers index rose to 53.5 in June from 52.8 in May, beating expectations of an increase to 53.2.
The ADP report and the increase in the ISM's employment gauge bode well for Thursday's release of the June employment report. Economists surveyed by The Wall Street Journal forecast employers added 233,000 jobs in June. The stock market is closed Friday.
In Asia, Chinese stocks continued to exhibit sharp swings. The Shanghai Composite Index ended 5.2% lower after trading largely flat earlier. The index ended back in bear territory, defined as a fall of 20% from a high.
FOREX:
The dollar rose against the euro and the yen, after better-than-expected U.S. jobs and manufacturing numbers signaled a strengthening economy.
The Labor Department will release the June employment report on Thursday. Economists predict the U.S. economy added 233,000 new jobs last month.
Investors bought dollars in anticipation of a stronger jobs report, said Carl Forcheski, director, corporate FX sales at Societe Generale.
"For now, the market's reacting more to improved economic prospects in the U.S. We're beginning to see economic indicators consolidate to firmer levels," Mr. Forcheski said. "Hopefully, we'll see confirmation of more wage growth in the nonfarm payrolls report."
The dollar continued to rise against rivals on the back of stronger U.S. data, the latest sign that investors predict the U.S. economic recovery will spark a resumption in the greenback's ascent.
Expectations for higher U.S. interest rates that had drawn investors to the dollar and driven it to multiyear highs against rivals flagged in March on signs that the economy had slowed. But improving data for May reignited hopes that the Federal Reserve would raise rates at least once before the end of 2015, a move many expect will draw investors from around the globe to U.S. assets at a time when risks abound.
BONDS:
U.S. government bonds sold off as renewed hopes on Greece and a solid U.S. private-sector employment report sapped demand for haven assets.
A broader gauge of the labor market--the nonfarm jobs report for June--is due Thursday morning, an important datapoint to influence the timing of the Federal Reserve's plan to start raising short-term interest rates before the end of the year.
Traders say further evidence of robust jobs growth would bolster the case for the Fed to tighten policy as soon as September, which could shrink the value of outstanding bonds.
"Bond yields should move higher barring a disorderly" event on Greece, said Jeff Klingelhofer, co-portfolio manager of global fixed-income portfolios at Thornburg Investment Management, which has about $61 billion in assets under management. "The U.S. economy is on a stronger footing," and the Fed is expected to "normalize interest rate policy" later this year, he said.
Demand for ultrasafe U.S. government debt has soured as economic indicators over the past few months in employment and consumer spending have suggested that the U.S. economy is strengthening from a shallow contraction during the first three months of the year. Worries over deflation risks in the eurozone, which prevailed earlier this year, have diminished after the European Central Bank launched its bond-buying program in March.
Many investors have been shedding their bond holdings to prepare for the Federal Reserve's rate-increase campaign for the first time since 2006. Investors are concerned that a tightening of monetary policy would send interest rates broadly higher, shrinking the value of outstanding bonds.
Wednesday's ADP report is the latest signal of growth in the labor market. The private sector added 237,000 new jobs last month, beating 220,000 forecast by economists polled by The Wall Street Journal. Meanwhile, a monthly index for the manufacturing sector rose to 53.5 last month, the fastest pace in five months.
Many money managers don't expect bond yields to rise sharply from here, citing the still-moderate pace of the economic growth in the U.S., uneven growth overseas and contained inflation pressure. The Fed has signaled that this tightening cycle would be slow and gradual, which would keep a lid on the rise in bond yields.
Negative sentiment on Treasury bond prices dialed back for a fourth consecutive week, according to the weekly Treasury client survey from J.P. Morgan Chase & Co. Investors who expect bond prices to fall dropped to 29% for the week ending Monday, from 34% a week ago. Those who expect bond prices to rise increased to 18% from 16% a week ago. Fencesitters, those who are neutral on bond prices, rose to 53% from 50%.
COMMODITIES:
Oil prices skidded to their lowest level in two months in a selloff spurred by a supply glut that just won't quit.
To the surprise of many analysts and investors, U.S. crude-oil stockpiles rose last week for the first time in nine weeks, according to a report from the Energy Information Administration. That unexpected increase comes on the heels of data released Tuesday showing that the nation's oil producers ramped up output in April to the fastest pace since 1971.
These renewed signs of burgeoning crude supplies threaten the relative calm that has blanketed oil markets in recent weeks. Prices rebounded more than 25% early in the second quarter and then held steady amid the belief that growing demand and a sharp drop in drilling activity would ease the glut that had sent oil plunging to six-year lows earlier in 2015.
But the latest data show how resilient U.S. shale-oil producers have been to low prices, and some companies have said they can continue to grow production even at prices that are 45% below year-ago levels.
(MORE TO FOLLOW) Dow Jones Newswires
July 01, 2015 17:32 ET (21:32 GMT)
Pump prices have climbed alongside crude prices this year, but drivers continue to see a large savings. Retail gasoline prices averaged $2.76 a gallon Wednesday, according to AAA, the lowest level for this date since 2010.
Energy was the only one of 10 S&P 500 sectors that ended the day in negative territory, down 1.3%.
Last week, crude stockpiles rose even as refineries increased operations from 94% to 95% of capacity, the EIA said. Some analysts attributed the inventory increase to a large jump in imports after Tropical Storm Bill and a rebound in Canadian production following wildfires.
Negotiations on Iran's nuclear deal, which could potentially lead to more Iranian crude being sold on the already oversupplied global market, have added to the uncertainty.
In the precious metals market, gold prices fell to a nearly one-month low as stronger U.S. economic reports fanned worries about higher interest rates, while palladium futures leapt on hopes that stronger car sales would revive demand for the metal.
TODAY'S HEADLINES:
Greek Offer Falls Short of Demands
A new proposal for budget cuts and policy overhauls from Greek Prime Minister Alexis Tsipras was dismissed by European officials as insufficient to revive negotiations over a new bailout.
China Approves Six IPOs Despite Market Turmoil
China's stock regulator approved plans for six initial public offerings despite a market slump into bear territory and no sign of immediate recovery.
Global Dairy Prices Hit a Six-Year Low in Auction
International dairy prices fell to a six-year low in the overnight GlobalDairyTrade auction for July 1, an international trading platform.
U.S. Justice Department Probes Airlines for Collusion
The Justice Department is investigating some U.S. airlines for "possible unlawful coordination," a spokeswoman said.
ACE to Buy Chubb for $28.3 Billion
ACE agreed to buy fellow property-and-casualty insurer Chubb in a cash-and-stock deal valued at $28.3 billion.
Chrysler, Ford Sales Rise; GM Falls
Several top auto makers posted higher U.S. sales in June, capping a fast-paced first half and prompting analysts to lift annual light-vehicle-sales forecasts.
Arrested Toyota Managing Officer Resigns
Toyota Motor Corp. Managing Officer Julie Hamp quit her job after her arrest over alleged illegal drug imports into Japan, in a setback for President Akio Toyoda's campaign to diversify his executive ranks.
DOJ Sues to Block Electrolux Deal for GE's Appliance Business
The Justice Department filed a lawsuit seeking to block Electrolux from acquiring GE's appliance business, alleging the deal would hurt competition.
Bill Gross Gets Co-Manager After Deal
Janus Capital is spending at least $85 million to buy a majority interest in Kapstream Capital, and one of the Australian-American bond fund's founders will join Bill Gross's fund as a co-manager.
SEC Proposes Broadened Corporate 'Clawback' Rule
U.S. securities regulators proposed rules requiring public companies to "claw back" some of their top executives' compensation if their firms' financial statements later turn out to have contained errors.
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TODAY'S CALENDAR:
(All Times GMT, followed by country and event)
2300 SKA May Balance of payments
2350 JPN Jun Monetary Base
0000 NZ Jun QV Nationwide Residential Property Values
0130 AUS May International Trade in Goods & Services
0600 UK Jun Nationwide House Price Index
0830 UK Jun CIPS / Markit Construction PMI
0900 EU May PPI
1000 FRA May OECD CPI
1130 EU ECB accounts of its last monetary policy discussions
1230 US U.S. Weekly Export Sales
1230 US Jun U.S. Employment Report
1230 US 06/27 Unemployment Insurance Weekly Claims Report - Initial Claims
1300 SIN Jun Singapore Purchasing Managers' Index (PMI)
1330 CAN Jun Canada Manufacturing PMI
1345 US Jun ISM-NY Report on Business
1345 US Bloomberg Consumer Comfort Index
1400 US May Manufacturers' Shipments, Inventories & Orders (M3)
1430 US 06/26 EIA Weekly Natural Gas Storage Report
1510 EU ECB President Mario Draghi speaks at T2S launch celebration event
2030 US Money Stock Measures
2030 US Federal Discount Window Borrowings
2030 US Foreign Central Bank Holdings
(END) Dow Jones Newswires
July 01, 2015 17:32 ET (21:32 GMT)
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