Stocks rebounded from the most brutal day of the year on Monday and finished the session higher. The S&P 500 is back in the green for the year, although the Dow did not recover its year-to-date losses as markets closed out the second quarter and first half of the year.
First, the scoreboard:
- Dow: 17,632.82, +36.47, (0.21%)
- S&P 500: 2,064.88, +7.24, (0.35%)
- Nasdaq: 4,989.41, +30.94, (0.62%)
And now, the top stories on Tuesday:
- Greece has asked for a new two-year bailout. At midnight in Athens, it will miss a €1.6 billion ($US1.79 billion) payment to the International Monetary Fund. The bailout from the European Stability Mechanism is being requested to help meet all of Greece’s internal and external debt payments. Someone in London is raising money on Indiegogo, and the page crashed due to “astonishing popularity.”
- German chancellor Angela Merkel said there will be no new bailout talks until after the July 5 referendum vote in Greece. Greek prime minister Alexis Tsipras called for the special vote last Friday so that citizens can choose whether to accept the terms presented by creditors for a bailout extension. Meanwhile, Greek banks and stock markets remain closed to plug the flow of cash out of the country.
- In economic data, consumer confidence surged to 101.4 in June, crushing the forecast for 97.4, and up from 95.4 last month. In the release, the Conference Board’s Lynn Franco said: “Over the past two months, consumers have grown more confident about the current state of business and employment conditions. In addition, they are now more optimistic about the near-term future, although sentiment regarding income prospects is little changed.”
- The Case-Shiller home price index rose less than expected in April. Prices rose 0.3% month-over-month (0.8% expected,) and 4.9% year-over-year (5.5% expected.) “Home prices continue to rise across the country, but the pace is not accelerating,” said S&P Dow Jones Indices’ David Blitzer in the release.
- The Chicago Purchasing Manager Index climbed to 49.4 from 46.2 last month, missing expectations, and signalling a contraction in Midwest manufacturing activity for a fourth straight month. “The Barometer hit a 5½ year low in Q2 and the weakness is having a detrimental impact on the level of hiring,” said Philip Uglow, chief economist of MNI Indicators, in the release.
- Fitbit shares soared more than 13% after RBC Capital Markets initiated coverage of the company with an “Outperform” rating. In a note Tuesday, the analysts the maker of fitness trackers is quickly growing its market share, and its products are seeing stronger demand from consumers than the Apple Watch. “A broadening ecosystem, international, and corporate wellness growth may enable Fitbit to reach ~$US2.3B in revs. in CY17E, a +45 per cent [compound annual growth rate],” they wrote. The stock rose to as high as $US38 per share; RBC analysts have a $US45 price target.
- US mergers and acquisition (M&A) volumes broke the $US1 trillion mark in the first half of the year, and marked the first time any country has done so. In all, targeted M&A totaled $US1.03 trillion. May was the strongest month, due to Charter Communications’ $US79.6 billion bid for Time Warner Cable announced late in the month.
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