By Anora Mahmudova and Carla Mozee, MarketWatch
Ace to buy Chubb in $28 billion deal
U.S. stocks trimmed some of the early morning gains but were
still trading sharply higher Wednesday as investors looked beyond
the latest developments in Greece and focused on economic data.
Greece is going ahead with a referendum on July 5 to decide
whether to accept the austerity demands of its creditors. Talks
over the past few weeks to negotiate a bailout deal ended
fruitlessly and Greece is now in arrears with its IMF loan
repayment.
Meanwhile, investors assessed economic reports as well as
monthly car sales.
The S&P 500 added 15 points, or 0.7%, to 2,077. The Dow
Jones Industrial Average jumped 133 points, or 0.8%, to 17,752. The
Nasdaq Composite gained 34 points, or 0.7% to 5,021.
Earlier futures got a lift after the Financial Times reported
Greek Prime Minister Alexis Tsipras is ready to accept nearly all
of the conditions
(http://www.marketwatch.com/story/greek-pm-tsipras-ready-to-accept-bailout-terms-ft-2015-07-01)
to a new bailout deal that its international lenders proposed over
the weekend. But subsequent reports on the debt talks threw cold
water on the idea of a new deal being accepted.
Follow the latest news in the Greek debt crisis
(http://www.marketwatch.com/story/greek-debt-crisis-latest-news-on-wednesday-2015-07-01).
Albert Brenner, director of asset allocation strategy at
People's United Wealth, commenting on rising prices, said that it
appeared investors changed their minds about what impact Greece's
leaving of the eurozone will have on the rest of the continent.
"Investors observed the higher degree of unity among eurozone
ministers when dealing with Greece and are betting that Grexit will
not be followed by other peripheral states," Brenner said.
He also noted that while Greece has a terrible debt problem,
IMF's austerity prescriptions are counterproductive and unlikely to
help the country's economy.
Signs the market thinks a Greece deal is probable
(http://www.marketwatch.com/story/signs-the-market-thinks-a-greece-deal-is-probable-2015-07-01)
ECB's dilemma: To keep Greek banks alive, or not?
(http://www.marketwatch.com/story/ecbs-dilemma-to-keep-greek-banks-alive-or-not-2015-07-01)
At the half-year mark, the S&P is 0.2% higher, while the Dow
is 1.1% lower. The Nasdaq is up 5.3% so far this year. Read Need To
Know: Humdrum first half bodes well for the rest of the year
(http://www.marketwatch.com/story/a-humdrum-first-half-for-stocks-bodes-well-for-the-rest-of-the-year-2015-07-01).
Matthew P. Kaufler, portfolio manager at Federated Investors,
said ADP number, while not the most reliable data point, is still
pointing to continued growth in the labor market.
"The economy is approaching full employment and consumers are
becoming more confident. We view that as a positive," Kaufler
said.
In economic news, a report on private-sector hiring showed
237,000 news jobs
(http://www.marketwatch.com/story/private-sector-adds-237000-jobs-in-june-adp-2015-07-01-891185)were
created in June, topping economists' estimates. Official government
reports on monthly job gains is due to be released on Thursday,
with economists forecasting 225,000 jobs created last month.
U.S. manufacturers grew in June at fastest rate in five months:
ISM
(http://www.marketwatch.com/story/us-manufacturers-grew-in-june-at-fastest-rate-in-five-months-ism-2015-07-01)
Corporates: Chubb (CB) shot up as much as 35% ahead of the open
after ACE (ACE) said it plans to buy the speciality-insurance
company in a cash-and-stock deal valued at $28.3 billion
(http://www.marketwatch.com/story/ace-agrees-to-buy-rival-insurer-chubb-for-283-billion-2015-07-01-71034524).
ACE shares climbed as much as 11% premarket. ACE said the deal will
immediately boost per-share earnings and book value and generate
$650 million in savings.
General Motors (GM) shares fell 1.5% after the car maker
reported a sharp drop in monthly sales.
Chrysler, Ford Sales rise in June, GM's fall
(http://www.marketwatch.com/story/chrysler-ford-sales-rise-in-june-gms-fall-2015-07-01)
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/constellation-general-mills-ford-gm-in-the-spotlight-2015-07-01).
Other markets: European stocks surged on Wednesday's
developments out of Greece. Asian markets overnight finished mixed.
Stocks in Shanghai sank 5.2%, but Japan's Nikkei picked up
0.5%.
Oil futures fell more than 2% while gold prices edged slightly
lower. The dollar was up against most of its rivals on the ICE
Dollar Index .
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