MARKETS AT A GLANCE
LAST CHANGE % CHG
DJIA 17776.91 93.33 0.53%
Nasdaq 4997.46 5.52 0.11%
S&P 500 2081.34 12.58 0.61%
Japan: Nikkei 225 20376.59 264.47 1.31%
Hang Seng 24975.31 -260.97 -1.03%
Shanghai Composite 3727.12 -48.79 -1.29%
S&P BSE Sensex 28171.69 -37.07 -0.13%
Australia: S&P/ASX 5581.4 106.4 1.94%
UK: FTSE 100 6432.21 -103.47 -1.58%
PRICE CHG YIELD
U.S. 2 Year 0/32 0.585
U.S. 5 Year 2/32 1.542
U.S. 10 Year 9/32 2.255
Australia 10 Year 8/32 2.914
China 10 Year 13/32 3.47
India 10 Year -2/32 7.966
Japan 10 Year 4/32 0.452
German 10 Year 1 3/32 0.648
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.7449 -0.005
Yen (USD/JPY) 122.56 -0.01
S. Korean Won (USD/KRW) 1134.83 8.74
Chinese Yuan (USD/CNY) 6.1996 -0.009
Euro (EUR/USD) 1.1011 -0.0045
WSJ Dollar Index 87.61 0.33
LAST CHANGE % CHG
Crude Oil 52.78 0.25 0.48%
Brent Crude 57.77 0.74 1.30%
Gold 1153.9 -19.3 -1.65%
(Data as of approximately 5 p.m. ET)
SNAPSHOT:
U.S. stocks overcame sharp intraday losses to end higher Tuesday. U.S. oil prices fell to a near-three-month low on concerns about a growing glut of crude oil and turmoil in the Chinese stock market. Treasurys ended higher amid fresh global jitters. Gold sank to a three-month low on a stronger dollar.
OPENING CALL:
Chinese shares are still falling and the Greek crisis continues to rumble. So far Greece has captured the bigger headlines. But European equity and sovereign bond market resilience suggest that Greece's problems are likely to remain contained. China, though, is a more substantial concern for global investors. The immediate focus is on Chinese officials' seeming inability to halt the relentless slide in domestic share prices. More worrying perhaps is the slide in iron ore and copper prices, which don't bode well for what's going on in the Chinese economy more generally. The impact has already spread to Australia, whose currency is hitting six-year lows against the dollar, limiting the Australian central bank's policy options.
EQUITIES:
U.S. stocks overcame sharp intraday losses to end higher, after a rout in commodities abated and as eurozone leaders considered proposals to offer Greece emergency financing.
The gains marked the biggest intraday reversal in nearly four years for the Dow Jones Industrial Average, which had tumbled as much as 218 points in midday trading. The blue-chip index ultimately ended the day with a gain of 93.33 points, or 0.5%, to 17776.91, capping its biggest intraday swing since October 2011.
The S&P 500 rose 12.58 points, or 0.6%, to 2081.34, recovering from a loss of as much as 1.2%. The Nasdaq Composite Index added 5.52 points, or 0.1%, to 4997.46.
The wide swings hewed closely to big intraday moves across the commodities markets. Raw materials from copper to gold to oil plunged early in the stock trading session, only to pare or reverse their steepest losses into the afternoon.
The swings whipped about companies in the energy sector, which gained 0.9% in the S&P 500 after falling as much as 1.4% intraday. The S&P 500 materials sector recovered from a loss of as much as 2% to close down 0.3%.
"Commodities bounced back and everything went with them," said Tom Carter, managing director at institutional brokerage JonesTrading. "Crude was getting nailed and it turned around. All the precious metals were getting crushed because of China."
Utilities stocks in the U.S. extended gains. The high-dividend sector is often sought out by investors when bond yields fall. Utilities shares in the S&P 500 advanced 2.5%.
Chinese stocks fell Tuesday, casting doubt on the government's ability to stem the slide.
FOREX:
The dollar rose to a five-week high against other currencies as concerns over the debt crisis in Greece and tumbling equities in China sent investors into assets they perceive as safe.
The Wall Street Journal Dollar Index, which compares the U.S. dollar against a basket of 16 currencies, gained 0.4% to 87.61, heading toward its highest closing level since June 1.
The dollar gained 0.9% against the British pound, with one pound buying $1.5464. The greenback traded flat versus the yen at Yen122.60, halting a three-day losing streak. The Japanese currency is also considered a haven asset.
The dollar pushed 0.4% higher against the common currency Tuesday, with one euro buying $1.1011. The greenback had pushed the euro as low as $1.0916 earlier in the session before the common currency pared losses during the afternoon on reports that eurozone leaders were discussing proposals to provide Greece with emergency financing.
Investors had moved into the dollar over fears that a failure for Greece and its creditors to reach a new bailout deal would push the country closer to exiting the eurozone.
During the latest meeting of eurozone leaders, Greece sought a deal that would secure interim financing until the end of the month in exchange for passing budgetary measures that, in theory, Greek voters had rejected in a referendum Sunday. News of the discussion boosted the euro, said Brad Bechtel, managing director in Jefferies FX Group.
"That's enough to move investors," Mr. Bechtel said. "We'll see if there's any teeth to it; we've been whipped around by headlines like this for months."
BONDS:
Fresh global jitters drove investors into the harbor of government bonds in the U.S., Germany and the U.K., sending benchmark 10-year yields in these countries to the lowest level in more than a month.
Greece's deepening debt crisis and China's plunging stock markets are muddling the outlook of a global economy still running at an uneven and fragile pace. A debt crisis in Puerto Rico has been brewing, with potential repercussions for the U.S. municipal debt market. Volatility in financial markets has been rising amid concerns over lofty valuations and the pending shift of the Federal Reserve into raising interest rates for the first time since 2006.
So far contagion from Greece has been contained. The U.S. stock markets strengthened Tuesday after an earlier selloff. There is still hope that a resolution could be reached to avoid a potentially disorderly exit by Greece out of the eurozone. Yet many investors have decided to dial back risk and moved cash into safer bond markets.
"There is a slim margin of error," said Mark Nash, portfolio manager at Invesco Ltd. which manages $812.4 billion as of May 31. "Any shock will undermine the still low level of the global economic growth. It is time to preserve capital."
Mr. Nash said he has cut holdings of government bonds sold by weaker economies in the eurozone, such as Spain and Italy, in recent days and added bunds and gilts in his European bond portfolio.
In late-afternoon trading, the yield on the benchmark 10-year Treasury note was 2.231%, compared with 2.28% on Monday. Bond yields fall as prices rise.
It is the yield's lowest closing level since June 1. The yield dropped 0.185 percentage points over the last three sessions, the biggest three-day drop since January.
COMMODITIES:
U.S. oil prices fell to a near-three-month low on concerns about a growing glut of crude oil and turmoil in the Chinese stock market.
Light, sweet crude for August delivery fell 20 cents, or 0.4%, to $52.33 a barrel on the New York Mercantile Exchange, the lowest settlement since April 13.
Brent, the global benchmark, rose 31 cents, or 0.5%, to $56.85 a barrel on ICE Futures Europe, after falling as low as $55.10 a barrel earlier in the session.
On Monday, oil prices posted their largest declines since February on concerns about a continued oversupply of crude. Output from the U.S. and the Organization of the Petroleum Exporting Countries has increased in recent months, surprising some investors who had expected production to decline as low oil prices prompted producers to slash spending on new production. Though demand has risen sharply, some market watchers say that consumption won't be enough to eat away at the global glut of crude oil until 2016.
The U.S. Energy Information Administration said Tuesday that U.S. production fell from a 44-year high in May and is expected to keep declining through February 2016. Even so, the agency expects global supplies to exceed consumption this year and next.
Recent data showing higher-than-expected oil supplies, along with concerns about the crisis in Greece and the stability of China's stock market, have prompted some traders to pull back from bullish bets on oil. Money managers, including hedge funds, cut their aggregate bet on rising oil prices in the week ended June 30 to the smallest since April, according to the Commodity Futures Trading Commission.
"It's been three days of can't-catch-your-breath," said Michael Hiley, an energy trader at brokerage LPS Partners, adding that traders got caught off-guard and had to close out positions once prices broke out of the narrow band they had traded in for several weeks.
"We were sort of stuck in a range for two months and then it's gone," Mr. Hiley said. "It's hard to pick a bottom here."
Silver prices slumped to their lowest level in five years while gold sank to a three-month low as a stronger dollar tarnished the appeal of precious metals to investors holding weaker currencies.
TODAY'S HEADLINES:
Europe Struggles to Keep Greece in Eurozone
Eurozone leaders were considering proposals to provide Greece with emergency financing to avert another default in exchange for passing at least some of the economic measures Greek voters rejected last weekend.
(MORE TO FOLLOW) Dow Jones Newswires
July 07, 2015 17:30 ET (21:30 GMT)
Iran Nuclear Talks to Continue Beyond Deadline
Iran and six major powers will continue negotiations through Tuesday night's deadline.
IMF: U.S. Economy at Risk of Stalling If Rates Raised Too Soon
The Federal Reserve risks stalling the U.S. economy by raising interest rates too early, the International Monetary Fund warned.
U.S. Trade Gap Widens as Overseas Headwinds Gather
The U.S. trade gap expanded modestly in May due to a slowdown in exports, suggesting a stronger dollar and global turmoil will weigh on economic growth this year.
Fed Approves BB&T Purchase of Susquehanna Bancshares
BB&T got a key regulatory approval to buy Susquehanna Bancshares, marking the bank's second deal to get a green light in as many months.
Fed Hits Santander's U.S. Unit With Sweeping Enforcement Action
The Fed is requiring Banco Santander to improve risk management at U.S. subsidiaries under an enforcement action.
Canada's Trade Deficit Widens in May
Canada's trade gap widened more than expected in May as non-energy exports fell, indicating that Canadian exporters outside the oil patch are struggling despite a weaker Canadian dollar and a strengthening U.S. economy.
Horizon Pharma Offers to Buy Depomed for $1.75 Billion
Horizon Pharma has proposed to buy Depomed for $1.75 billion in stock, as another Ireland-based company seeks to use its tax-friendly status to lure a U.S. company.
Allergan Buys Rights to Merck's Migraine Drugs
Allergan said that it has reached a deal to buy the exclusive world-wide rights to two of Merck's experimental migraine drugs for an upfront payment of $250 million.
Corzine, Other Ex-MF Global Officials Settle Suit for $64.5 Million
Jon S. Corzine and other former MF Global officials will pay $64.5 million to settle an investor lawsuit, according to a court filing.
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TODAY'S CALENDAR
(Times in GMT, followed by country and event)
2350 JPN May Balance of Payments
2350 JPN Q1 Revised Balance of Payments
2350 JPN Jun Bank Lending
2350 JPN Jun International Transactions in Securities
2350 JPN Jun Provisional Trade Statistics for 1st 20 days of Month
0300 SKA Jun Economic Trends, including household loans, money supply index Lf
0300 SKA May Money Supply index L
0400 AUS Jul Monthly Leading Indicator of Employment
0430 JPN Jun Corporate Insolvencies
0500 JPN Jun Economy Watchers Survey
0600 GER May Manufacturing turnover
0700 UK Jun Halifax House Price Index
0830 UK Financial Policy Committee record of latest meeting
1000 FRA May OECD Composite Leading Indicators
1100 US 07/03 MBA Weekly Mortgage Applications Survey
1130 UK Chancellor George Osborne's Summer Budget
1230 US U.S. Treasury Sec Lew speaks on five years of the Dodd-Frank Wall Street Reform and Consumer Protect Act
1330 CAN May Building permits
1430 US 07/03 EIA Weekly Petroleum Status Report
1800 US Federal Open Market Committee meeting minutes and economic forecast
1900 US May Consumer Credit
1900 US IMF Managing Director Christine Lagarde speech at the Brookings Institution
2301 UK Jun RICS Residential Market Survey
2350 JPN May Orders Received for Machinery
2350 JPN Jun Money Stock, Broadly-defined Liquidity
(END) Dow Jones Newswires
July 07, 2015 17:30 ET (21:30 GMT)
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