Greece: The Dow Whisperer
Yesterday's market session closed down after former Greek Prime Minister Lucas Papademos restated that Greece needed to accept austerity measures or risk a messy exit from the eurozone. The sour news carried over into today, and the broad markets opened with a heavy sell-off, with the Dow Jones Industrials (INDEX: ^DJI) trading down just shy of 1.5%.
However, just as Papademos' comments startled the markets, rumors came out of Europe suggesting that European leaders were committed to protecting the financial stability of the bloc, as they shared enthusiasm about putting together a deal to keep Greece in the union. Those whispers were considered to be the adrenaline that reversed the day's course, with the markets rallying to finish off the day. The Dow climbed back to breakeven on the day, closing down 0.05%.
Whether or not you believe that conversations of foreign politicians are dictating the broad markets, the mere fact that numerous reports are talking about it shows just how unpredictable the situation is becoming and how panicky investors are over the potential ramifications of a nasty divorce between Greece and the EU.
On the domestic front, the day started with positive news as new-home sales increased 3.3% from March to April. This announcement came on the heels of a report from the National Association of Realtors saying that existing-home sales touched a two-year high, in a small sign that housing markets could regain some semblance of normality.
The technology sector was held back today, led by a non-Dow component, Dell (NAS: DELL) , which missed second-quarter earnings after yesterdays close and lost more than 17% of its value. Hewlett-Packard (NYS: HPQ) ended the session down 3.21%, but after slightly beating analyst estimates and dropping a bombshell of plans to reduce its employee count by 27,000, HP regained ground to the tune of 10% after hours.
In other tech news, Facebook recorded its best day since its IPO last Friday, closing up 3.23%, as the company hints of leaving the Nasdaq for the NYSE after numerous lawsuits were filed following Nasdaq's trading delays on the morning of Facebook's IPO launch.
Another whipping boy for the early part of trading was energy. Worries of residual complications from a rough Greek transition dropped crude prices just under 1.5% midday, but the rally brought Texas tea back up into the green. ExxonMobil (NYS: XOM) mimicked oil futures, creating a parabola-shaped chart as it followed the day's news.
Bank of America (NYS: BAC) led the Dow today, up 2.72%, but had a small effect on the index, since it carries the least weight of all 30 components.
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At the time this article was published Joel South owns shares of no company listed above. The Motley Fool owns shares of Bank of America.Motley Fool newsletter serviceshave recommended buying shares of Dell. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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