By Anora Mahmudova and Carla Mozee, MarketWatch
Ace to buy Chubb in $28 billion deal
U.S. stocks came down from session highs but were still trading
higher Wednesday as investors looked beyond the latest developments
in Greece and focused on economic data.
Greece is going ahead with a referendum on Sunday to decide
whether to accept the austerity demands of its creditors. Talks
over the past few weeks to negotiate a bailout deal ended without a
deal, and Greece is now in arrears on its IMF loan payment.
Meanwhile, investors assessed economic reports as well as
monthly car sales.
The main indexes steadily paired early morning gains, aided by a
sharp drop in energy stocks. The S&P 500 were 8 points, or
0.3%, higher to 2,069. Financials led the gains on the benchmark
index, while energy stocks -- the only sector trading lower -- fell
following a sharp drop in oil prices.
The Dow Jones Industrial Average was up 77 points, or 0.4%, to
17,697. The Nasdaq Composite rose 9 points, or 0.2% to 4,996.
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)
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 29% 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 1.6%. ACE said the deal will immediately boost
per-share earnings and book value and generate $650 million in
savings.
General Motors (GM) shares fell 1.9% after the car maker
reported a sharp drop in monthly sales. Ford Motors (F) shares were
also 1.2% lower.
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
(http://www.marketwatch.com/story/oil-eyes-5-week-low-after-surprise-us-supply-climb-2015-07-01)
dropped more than 3%, approaching their lowest settlement in nearly
five weeks after government data revealed an unexpected increase in
weekly crude supplies.
Gold prices
(http://www.marketwatch.com/story/gold-dips-as-greek-hopes-upbeat-adp-report-weigh-2015-07-01)
edged slightly lower. The dollar was up against most of its rivals
on the ICE Dollar Index .
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