DJIA ekes out gain as Greece’s hopes given boost: Morning market insights

The Dow industrials broke a six-session losing streak as a potential breakthrough by Greek political leaders eased immediate concerns about the country’s exit from the euro zone.

The Dow Jones Industrial Average gained 19.98 points, or 0.2%, to 12,855.04. Blue chips survived a last-minute swoon, after having turned negative in the final minutes of the session, to snap their longest losing streak since August.

The Standard & Poor’s 500-stock index advanced 3.41 points, or 0.3%, to 1,357.99, as utility and telecommunications stocks led the market higher.

The technology-heavy Nasdaq Composite fell 1.07 points, less than 0.1%, to 2,933.64 as Cisco Systems slumped 11%. The networking-equipment company gave a downbeat outlook for the quarter ahead, warning that big customers were exercising caution with technology spending.

US stocks followed gains in Europe, where hopes rose that Greece might cobble together a government and prevent a fractious election.

In economic news, a weekly labour-market report beat expectations. Claims for unemployment benefits fell slightly last week versus expectations for claims to rise, though a reading on the previous week was revised slightly higher. Separately, the US trade deficit widened in March, as a wave of oil imports and Chinese goods overwhelmed record exports.

In corporate news, Priceline.com fell 5.3% after the online-travel booker reported first-quarter earnings that exceeded forecasts but provided a cautious outlook for the second quarter.

Avon Products gained 3.3% after Coty Inc. boosted its bid to buy the company to $24.75 a share and disclosed Warren Buffett’s Berkshire Hathaway is participating in its bidding group.

For Australian ADRs listed on the NYSE, BHP Billiton increased 85 cents (1.23%) to $70.18, ResMed advanced 64 cents (1.91%) to $34.20, Telstra Corporation improved 6 cents (0.31%) to $18.40, Telecom Corporation of NZ improved 19 cents (1.84%) to $10.51 and Westpac increased $1.07 (0.93%) to $115.85.

A solid 30-year-bond sale sparked buying in the US Treasurys market, though the rally fell short of pulling prices into positive territory. At 7:45 AEST, the 10 Year Treasury note was 1.87%, and the 5 Year note was 0.76%.

European equities rose as Spanish and Greek stocks bounced back from recent declines, while better-than-expected results from UniCredit SpA boosted financials.

The Stoxx Europe 600 index ended 0.6% higher at 251.10.

Among financials, shares of Dutch insurer and pensions group Aegon NV soared 10.1% after reporting a surprise increase in first-quarter net profit.

The sector also got a lift from UniCredit after the Italian lender reported a 13% increase in first-quarter net profit. Its shares rose 6.8%.

Peripheral markets such as Italy’s led Europe higher: The FTSE MIB Italy index rose 1.7% to 14,004.9.

In Spain, a move by the government to take a 45% stake in Bankia SA, effectively nationalising the troubled lender, caused the IBEX 35 to rally. The index rose 3.2% to 7,034, more than reversing a 3% tumble in the prior session on banking-sector worries. Bankia’s shares closed 0.3% lower.

Shares of BBVA SA soared 6% and Banco Santander SA jumped 5.6%.

Meanwhile, shares of oil major Repsol SA soared 8.2% after reporting improved first-quarter profit driven by higher oil prices.

On the FTSE100, Rio Tinto increased 22.50 pence (0.72%) to 3,167.19 pence and BHP Billiton firmed 7.50 pence (0.4%) to 1,872.55 pence.

Asian markets edged lower after disappointing China trade data, while India’s rupee rallied after the government imposed foreign-exchange restrictions aimed at halting the currency’s recent slump.

The Nikkei fell 0.4% to 9,009.65 after earlier dropping below 9,000 for the first time since February. Korea’s KOSPI fell 0.3% to 1,944.93, Hong Kong’s Hang Seng Index was down 0.5% at 20,227.28 and China’s Shanghai SE Composite closed flat at 2,410.23.

Although ongoing coalition talks in Greece and the high cost of Spanish borrowing remained a concern, markets struggled to find a direction in early trade but then fell after China posted a wider trade surplus due to weak imports, reflecting sluggish performance in the world’s second biggest economy. China will release more data, including industrial output, retail sales, and inflation figures.

Continuing the trend of Japanese companies offering healthy forecasts, Toyota Motor Corp rose 0.8% after it released operating profit guidance of Y1 trillion for the year ending March.

In China, brokerages were among the most active gainers, benefiting from bargain hunting after suffering sharp losses earlier in the week. Sinolink Securities was up 1.4% at CNY14.36 and Huatai Securities was up 0.8% to CNY10.12.

Medical equipment, machinery and furniture stocks were also did well, as investors rotated holdings during a bout of market consolidation. Lepu Medical Technology was up 3.7% at CNY14.99 and Changsha Sinocare gained 2.9% to CNY39.90.

In Hong Kong, China-related financial shares were the among the day’s biggest blue-chip decliners. Bank of Communications was down 0.9% at HK$5.53, while Ping An Insurance was down 0.5% at HK$61.70.

Cathay Pacific Airways fell 6.3% after warning late that first-half financial results will be “disappointing” as high fuel costs persist, prompting the airline to cut flights and seek cost cuts.

The NZX-50 closed up 0.3% at 3,569.054, largely bolstered by a 1.6% gain in Chorus to NZ$3.20.

Base metals closed mixed on the London Metal Exchange, stabilising in line with stock markets and the euro after US jobless data came in lower than expected and signs emerged that Greek leaders could form a government and shore up its commitment to remain in the euro zone. US crude oil settled modestly higher, snapping a six-day losing streak that slashed prices by 8.8% to three-month lows. Gold eked out a slight gain, rising for the first time this week as relative calm in Europe drew buyers back to the precious metal after a three-day selloff.

The euro clawed back some of its recent losses against the dollar on what market participants said was slightly better news out of the battered common-currency zone.

Australian market

Australian equities expected to open higher

Australian shares are expected to start the day with gains as investors have their fears slightly alleviated via the recent turn of events in Greece.

Ahead of the local open, SPI 200 futures were down 6 points to 4,295.

This article first appeared on Morningstar.