Europe hits Wall Street, Oracle rallies late
NEW YORK, June 19 — The Nasdaq advanced on Monday, propelled by a rally in Apple and other big-cap tech stocks, but fears Europe's debt crisis is in danger of worsening limited broader gains.
Positive analyst comments lifted both eBay, up 4.5 per cent to US$42.49 (RM134), and Groupon Inc , up 10.8 per cent at US$11.15. Apple Inc accounted for about half the Nasdaq's rise, climbing 2 per cent to US$585.78.
The S&P eked out a slight gain as it bumped up against its 50-day moving average around 1,347 while the Dow ended lower.
Oracle Corp shares climbed 5.3 per cent to US$28.57 in after-hours trading after the software maker reported fourth-quarter revenue that beat expectations, helped by record sales of new software licenses.
A weekend election victory by pro-bailout parties in Greece removed one headwind facing the euro zone. But rising bond yields in Spain and Italy reinforced views that Europe has yet to control its debt crisis.
The election "wasn't a game changer and does little to alleviate the larger issues that remain in Europe," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
A senior official with Greece's New Democracy party, the conservatives who won Sunday's election and who back Athens' international bailout plan, told Reuters that Greece would form a government on Tuesday.
But there were conflicting signals about the way forward. The leader of New Democracy, Antonis Samaras, pledged his commitment to Greece's international bailout package, but also said there would have to be "some necessary amendments."
Meanwhile, Germany's chancellor, Angela Merkel, said any loosening of agreed reform pledges would be unacceptable.
The election results also offered little reprieve from contagion concerns as yields on both Italian and Spanish bonds rose, with Spain's 10-year yield climbing above the 7 per cent mark at which other highly indebted euro-zone nations were forced to seek bailouts.
European authorities have already agreed to a 100-billion-euro (RM397 billion) rescue for Spain's troubled banks.
Market participants were also reluctant to take bets ahead of the U.S. Federal Reserve's two-day policy meeting, with investors keen to see if the Fed will announce new stimulative measures in its policy statement at the meeting's close on Wednesday afternoon.
"Without knowing what will come from the Fed meeting on Wednesday, the market doesn't want to get ahead of anything," Luschini said.
The Dow Jones industrial average .DJI was down 25.28 points, or 0.20 per cent, at 12,741.89. The Standard & Poor's 500 Index .SPX was up 1.94 points, or 0.14 per cent, at 1,344.78. The Nasdaq Composite Index .IXIC was up 22.53 points, or 0.78 per cent, at 2,895.33.
Last week, U.S. stocks rallied on Thursday and Friday on news that central banks of major economies would take steps to stabilize markets if necessary after the Greek vote. As a result, much of the bullish bias of the election news was priced in. The S&P 500 rose 5.1 per cent in the last two weeks.
An index of energy shares .GSPE fell 0.8 per cent on Monday, with the sector ranking as the S&P 500's worst performer. U.S. crude futures dropped 1 per cent after falling for six of the last seven weeks. <O/R>
European shares erased early gains and closed flat, with the FTSEurofirst 300 index .FTEU3 up 0.04 per cent.
Also in the technology sector, Facebook (FB.O) struck a deal to acquire Face.com, whose facial-recognition technology has been in use on the social network. Facebook shares jumped 4.7 per cent to US$31.41, taking its cumulative gains in the last three sessions to about 16 per cent.
DSW Inc (DSW.N) plunged 11.3 per cent to US$52.13 after the footwear retailer gave a quarterly earnings outlook below analysts' expectations.
Volume was light, with about 5.78 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84 billion.
About 57 per cent of stocks traded on the New York Stock Exchange closed higher while the number of advancers and decliners on the Nasdaq was about even. — Reuters