By Anora Mahmudova and Sara Sjolin, MarketWatch
Trade deficit widens as strong dollar hurts export
U.S. stocks rebounded off their lows in bumpy trading Tuesday,
driven by uncertainty over the future of Greece and concerns over
China's sluggish economy.
The S&P 500 briefly turned positive but pulled back to trade
flat at 2,067 in a choppy trading session, where the index had
tumbled by more than 20 points earlier. The S&P 500's move
lower had briefly put it below a key support level last breached in
October.
The Dow Jones Industrial Average was down 32 points, or 0.2%, to
17,650 but had seen a more than 200-point drop earlier. The Nasdaq
Composite also pared more brutal declines to move 0.6% lower, or
down 30 points, to 4,961.
Jittery trading has been driving the market action throughout
the day as European officials attempt to hash out a credible
bailout plan for Greece, while the government intervention in
China's stock market also has unsettled traders.
Worries among global investors over Europe and Asia could be
spotted from falling government bond yields, which move inversely
to bond prices, as investors sought the safety of government bonds.
The yield on a 10-year Treasury note fell 6 basis points to
2.23%.
"The selloff is due to a number of factors and Greece is one of
them," said Brian Fenske, head of sales trading at ITG.
"China's local stock market has essentially crashed, but that is
now spilling over to U.S.-listed Chinese companies. Technology
stocks are selling off due to some bad news from chip-makers,"
Fenske said.
"Large moves in oil and copper prices are adding to the selling
pressure, which is why we are seeing big drops in materials
stocks," he added.
Greece remained in the headlines on Tuesday as eurozone finance
ministers convened for an emergency meeting in Brussels to discuss
what's next for Greece after Sunday's referendum.
Greece's Tsipras-led government submitted a proposal on Tuesday
(http://www.marketwatch.com/story/greece-arrives-at-eurogroup-meeting-without-proposal-ft-2015-07-07)with
the same reform list that couldn't be discussed at the latest
Eurogroup meeting before the referendum results.
Read: Eurozone officials warn of possible 'Grexit' without
credible proposal from Greece
(http://www.marketwatch.com/story/eurozone-officials-warn-of-possible-grexit-without-credible-proposal-from-greece-2015-07-07)
Greece's stock market will remain shut Tuesday and Wednesday (),
alongside the extended closure of the country's banks, the Hellenic
Capital Market Commission said. Meanwhile, Global X FTSE Greece 20
ETF (GREK) slid 1.9% after a 7% slide on Monday.
Read: Greek debt crisis: Who's meeting and when on Tuesday
(http://www.marketwatch.com/story/greek-debt-crisis-whos-meeting-and-when-on-tuesday-2015-07-07)
"Investors need to get use to a shock like Greece, but there are
bigger issues that investors should be concerned about," said Bruce
McCain, chief investment strategist at Key Private Bank, referring
to precipitous falls in China's stock market.
"When fundamentals are shaky and valuations are stretched, stock
markets are vulnerable to shocks and usually it's unexpected ones
that trigger large selloffs," McCain said.
U.S. data: The U.S. trade deficit rose 2.9% in May, mostly
because the U.S. exported fewer aircraft and other manufactured
goods. The increase was smaller than expected by economists
surveyed by MarketWatch. Market reaction to U.S. trade data
released ahead of the opening bell was muted.
Job openings at U.S. workplaces rose to a record high of 5.36
million in May (data go back to the end of 2000) from 5.33 million
in April, the U.S. Department of Labor reported Tuesday.
Oil:Oil prices fell, after briefly ticking higher earlier in
electronic trade,
(http://www.marketwatch.com/story/crude-oil-struggles-to-recover-from-selloff-2015-07-07)
following Monday's carnage, with the August contract for crude oil
falling 1.1% to $51.94 a barrel. Brent crude for the same month
inched 0.2% lower to $56.43 a barrel.
The contracts slid 7.7% and 6.3%
(http://www.marketwatch.com/story/oil-tumbles-4-after-greek-voters-reject-creditors-reform-proposal-2015-07-06),
respectively, on Monday. The selloff was driven by the turmoil in
Greece and a potential Iranian nuclear deal, which may result in a
flood of millions of barrels of oil, adding to global supplies.
Movers & shakers: Shares of Advanced Micro Devices Inc.(AMD)
sank 16% after the chip maker cut its outlook late Monday
(http://www.marketwatch.com/story/amd-warns-revenue-to-fall-short-on-weak-pc-demand-2015-07-06).
A. Schulman Inc.(SHLM) plunged 11% after the plastic
manufacturer late Monday said it swung to a loss in the third
quarter
(http://www.marketwatch.com/story/a-schulman-swings-to-a-loss-cuts-forecast-2015-07-06-174854739).
Utilities stocks rallied, with the S&P 500 Utilities sub
sector gaining more than 2%. Recent 10% correction in the sector
drove the valuations to attractive levels. Duke Energy Corp (DUK)
jumped 3.3%, Public Service Enterprise Group Inc. (PEG) rose
2.3%.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/amd-a-schulman-advanced-auto-parts-shares-in-focus-2015-07-07).
Other markets: Chinese stock indexes moved sharply lower
(http://www.marketwatch.com/storyno-meta-for-guid), continuing the
recent downbeat trend in the country's financial markets. Trading
was halted in shares
(http://www.marketwatch.com/story/over-20-of-listed-china-stocks-now-in-trading-halt-2015-07-07)
in more than 200 mainland-traded China-traded companies during the
selloff. The rest of Asian markets closed mixed. European stocks
struggled for direction
(http://www.marketwatch.com/storyno-meta-for-guid), with investors
waiting for the latest word on Greece.
Gold fell 1.7% to $1,153.5, while the dollar rose against most
major currencies, rising 0.7% to 96.95.
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