By Anora Mahmudova and Sara Sjolin, MarketWatch
Manufacturing activity expands in February, but at a slow
pace
NEW YORK (MarketWatch) -- U.S. stocks crept into positive
territory on news reports that eurozone ministers reached an accord
over Greece's debt obligations.
News outlets cited a Greek government official, who said
Eurogroup ministers and Greece have agreed on a draft accord
(http://www.marketwatch.com/story/greek-official-says-apparent-accord-reached-bloomberg-2015-02-20)
that could extend Greece's bailout.
The S&P 500 (SPX) and Dow Jones Industrial Average (DJI)
were on track to finish the holiday-shortened week roughly where
they started it, after two consecutive weeks of solid gains. The
Nasdaq Composite (RIXF) looked at a weekly gain.
The S&P 500 erased earlier losses and was slightly higher.
Five of its 10 main sectors trading in the green. Energy and
utilities sector stocks led the losses.
The Dow turned a 100-point loss into a 40-point gain, with more
than half of its 30 members trading in positive territory.
The Nasdaq Composite also marched higher. The tech-heavy index
outperformed other benchmarks so far this year, gaining nearly 4%,
compared with a gain of less than 2% for the S&P 500.
A gauge of U.S. manufacturing activity ticked up, but the
expansion slowed down, indicating the economy has entered a soft
patch.
Channing Smith, portfolio manager at Capital Advisors, said it
is hard to explain investor enthusiasm that had led to the rally so
far this month.
"Markets are not pricing in an outcome in which Greece exists
eurozone and we find that assertions that it will not affect
markets as unfounded. It appears markets are certain a deal will be
reached at 11th hour. So, investors bought every dip so far," he
said.
Smith said investor optimism has been fueled the relative
strength of the U.S. economy, unbridled faith in central banks
across the globe, which have broadly adopted easy-money policies
amid deflation fears, and lack of alternatives.
Over the past few week, stocks tend to open weaker and rally
toward the end of the session.
"The February rally appears to have legs in the face of
disappointing economic data, reduced earnings estimates and ongoing
geopolitical uncertainty," he added.
Key decision on Greece: The debt standoff between Greece and its
eurozone partners has grabbed most investors' attention this week,
but so far hasn't created a major shake-up in the financial
markets. The European indexes eyed advances for the most part. The
lack of market response is partly because the risk of contagion is
much lower
(http://www.marketwatch.com/story/this-is-the-eurozone-risk-investors-are-ignoring-2015-02-19)
than in 2011 and 2012, MarketWatch's William Watts explains.
Eurozone finance ministers are meeting in Brussels to discuss
the latest proposal from Greece on extending its loan agreement.
The request was submitted on Thursday, but rebuffed shortly after
that by Germany
(http://www.marketwatch.com/story/cracks-still-evident-as-germany-rebuffs-greek-extension-plan-2015-02-19),
which said it wasn't a "substantial proposal for a solution".
European markets were mixed ahead of Friday's Eurogroup meeting
(http://www.marketwatch.com/storyno-meta-for-guid), with Greece's
Athex Composite index up 0.8% to 863.68.
Data: U.S. manufacturing activity picked up in February, with
the Markit flash purchasing managers index climbing to 54.3, above
forecasts by economists polled by MarketWatch. The final January
reading came in at 53.9, above the 50 level that separates
expansion from contraction. However, details were much weaker and
indicated the U.S. economy has entered a slower growth phase.
PMI readings out of the eurozone showed business activity in the
currency union grew
(http://www.marketwatch.com/story/european-economy-shows-signs-of-revival-2015-02-20)
at a faster pace in February than expected, to reach a seven-month
high.
Earnings: Farm-equipment manufacturer Deere & Co.(DE) was
down slightly after a lowered outlook offset a profit beat.
Wal-Mart's(WMT) shares fell 0.6% after analysts at Barclays
downgraded the company to equal weight from overweight and cut the
target price to $85 from $90.
Cabot Oil & Gas Corp.(COG) swung to a fourth-quarter loss
amid plunging oil prices and cut its growth outlook. The company
said it slashed its capital budget for 2015 to $900 million from
the roughly $1.5 billion it had expected to spend in October.
Noodles & Co.(NDLS) tanked 25% after the restaurant chain
late Thursday reported fourth-quarter earnings that fell short of
estimates
(http://www.marketwatch.com/story/noodles-stock-plunges-after-results-outlook-disappoint-2015-02-19)
(http://www.marketwatch.com/story/noodles-stock-plunges-after-results-outlook-disappoint-2015-02-19).
Intuit Inc. (INTU) shares jumped after its chief financial
officer said Thursday that the company hasn't found any evidence
that its systems were hacked into in connection with a number of
fraudulent tax-return filings this month.
For more on notable movers, read our Movers & Shakers column
(http://www.marketwatch.com/story/deere-labcorp-cabot-oil-earnings-in-focus-2015-02-20).
Other markets: Oil (CLH5) swung between gains and losses on
Friday, but was still looking at its first weekly loss in a month
(http://www.marketwatch.com/storyno-meta-for-guid).
Gold prices (GCJ5) gave up earlier gains and inched lower, while
the dollar (DXY) traded mixed against other major currencies.
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