The Week In Review

6/22-6/26/15

The stock market ended the week on a mixed note with the Dow Jones Industrial Average (+0.3%) posting a modest gain while the Nasdaq Composite (-0.6%) spent the day in negative territory. For its part, the S&P 500 ended flat, locking in a 0.4% decline for the week to end ahead of the Nasdaq (-0.7% week-to-date).

To little surprise, the trading day began with more rhetoric but little tangible progress between Greek leaders and the country's creditors. With that in mind, the talks are set to enter the eleventh hour with both sides sticking to their own proposals. This morning, Germany's Handelsblatt reported that creditors have offered Greece EUR15.50 billion in bailout funds over the next five months if Greek representatives can agree to the requested reforms; however, that offer was turned down by the Greek delegation. European markets appeared unconcerned with the lack of progress as France's CAC, Germany's DAX, and Italy's MIB spiked between 4.0% and 4.8% for the week. Not to be outdone, Greece's Athens General Composite surged 13.8% for the week, returning into the middle of this year's range.

Domestically, investors appeared to suffer from a case of Grexhaustion, showing little concern about the possibility of a Graccident as it now becomes imperative to reach a deal on Saturday if Greece is to make the June 30 debt payment to the International Monetary Fund. Failing to meet that deadline would put the 'Grexit' talk back on the table. That being said, U.S. Treasuries retreated into the afternoon with the 10-yr yield spiking eight basis points to 2.48%. Also of note, selling in the long bond ran the 30-yr yield higher by ten basis points to 3.25%, representing the highest level since September.

Six of ten sectors registered gains, but daylong weakness in the technology sector (-0.8%) was today's main story and the primary reason for Nasdaq's underperformance. Specifically, it was the high-beta chipmaker industry group that suffered from widespread losses after Micron (MU 19.66, -4.36) reported disappointing results and issued uninspiring guidance. Shares of MU plunged 18.2% to levels not seen since late 2013 while the PHLX Semiconductor Index lost 2.4% with all 30 components ending in the red.

That significant weakness weighed on the technology sector while the Nasdaq also had to contend with losses among biotechnology names. The iShares Nasdaq Biotechnology ETF (IBB 372.70, -3.13) lost 0.8% while the health care sector (-0.1%) spent the day near its flat line with hospital names offsetting the weakness in biotechnology.

Similar to the health care sector, the S&P 500 spent the day near its unchanged level. The index benefited from relative strength in just about every sector other than technology. Most notably, financials (+0.3%), consumer discretionary (+0.4%), and industrials (+0.2%) kept the benchmark index little changed throughout the day.

Of the three influential groups, the discretionary sector was underpinned by apparel retailers after Finish Line (FINL 28.25, +1.25) and Dow component Nike (NKE 109.71, +4.49) reported better than expected results. The two names gained 4.6% and 4.3%, respectively.

Elsewhere, the industrial sector rallied behind Deere (DE 96.44, +3.04), which spiked 3.3%, breaking out to a four-year high. There was no news to account for the move and other manufacturers of heavy machinery ended little changed. As for transport stocks, the Dow Jones Transportation Average (+0.1%) eked out a slim gain for the day, but not before notching a fresh eight-month low during morning action.

Today's participation was well above average as rebalancing of the Russell indices led to increased churn. As a result, nearly two billion shares changed hands at the NYSE floor.

Economic data was limited to the final reading of the Michigan Sentiment Index for June, which was revised up to 96.1 from a preliminary reading of 94.6 while the Briefing.com consensus expected no change. The June reading was up from 90.7 in May, representing the highest level for the index since hitting 98.1 in January.

Monday's data will be limited to the 10:00 ET release of the Pending Home Sales report for May.

Nasdaq Composite +6.8% YTD

Russell 2000 +5.9% YTD

S&P 500 +2.0% YTD

Dow Jones Industrial Average +0.7% YTD

Week in Review: All Eyes Remain on Greece

The stock market opened the trading week on a higher note with the Dow and S&P 500 gaining 0.6% apiece while the Nasdaq Composite (+0.7%) outperformed. Equity indices spent the entire Monday session in the green with investor sentiment receiving a boost from reports indicating Greek officials submitted a new proposal to the Eurogroup. However, regional officials did not share the market's optimism with Germany's Finance Minister Wolfgang Schaeuble saying he does not see anything new in the proposal. The developments pressured global bonds with Germany's 10-yr bund yield spiking 12 basis points to 0.88%. Similarly, the U.S. 10-yr note retreated throughout the day, sending its yield higher by ten basis points to 2.36%. Some of the outflows from the Treasury market made their way into equities as nine of ten sectors posted gains while the rate-sensitive utilities sector (-0.1%) was pressured by the increase in yields.

The major averages ended Tuesday on a modestly higher note after spending the bulk of the day near their flat lines. The S&P 500 added 0.1% after trading inside an eight-point range. Equity indices held modest gains at the start amid continued optimism that Greece will be able to come to terms with its creditors. In addition, better than expected Manufacturing (52.5; consensus 52.2) and Services PMI (54.4; consensus 53.6) readings for the eurozone contributed to the upbeat sentiment overseas. Once the U.S. session got underway, the S&P 500 held a four-point gain, but surrendered that advance just one hour into the session as heavily-weighted sectors like technology (unch), industrials (-0.2%), and consumer staples (-0.5%) weighed. The top-weighted technology sector was able to erase the majority of its loss before the final hour, but chipmakers struggled into the afternoon. The PHLX Semiconductor Index lost 0.6% with all but six components ending in the red.

The stock market ended the midweek session on a broadly lower note with the S&P 500 losing 0.7% and turning negative for the week (-0.1%). Equity indices began the day with slim losses after the International Monetary Fund rejected Greece's restructuring proposal, putting the two sides back at square one. According to Greek Prime Minister Alexis Tsipras, this was the first time the IMF did not accept equivalent fiscal measures proposed by Greek officials. Interestingly, the market appeared to be on the comeback trail during the opening hour with the S&P 500 making a brief appearance in the green; however, the index reversed into the red shortly after activist investor Carl Icahn shared his thoughts on the market as part of an appearance on CNBC. During his interview, Mr. Icahn said he believes the market is "extremely overheated," pointing to high-yield bonds in particular.

The market registered its second consecutive decline on Thursday with the S&P 500 (-0.3%) sliding below its 50-day moving average (2,107). The benchmark index held a modest gain through the morning, but relative weakness among several influential sectors pulled the S&P 500 into negative territory during afternoon action. Stocks began the day with slim gains, but retreated from their opening levels during the initial hour amid reports the Eurogroup meeting was suspended to give the Greek delegation time to submit a better proposal to the creditors. The market dipped from its opening levels in reaction, but was able to briefly extend to a fresh session high with the health care (+0.5%) sector driving the move after the Supreme Court upheld federal subsidies to the Affordable Care Act. Hospital names benefited from the news with the likes of Tenet Healthcare (THC 56.21, +6.13), HCA (HCA 90.72, +7.35), and Universal Health (UHS 140.82, +10.14) spiking between 7.8% and 12.2%. Also in the health care sector, insurer Humana (HUM 197.37, +13.14) surged during the afternoon and ended higher by 7.1% after Bloomberg reported the company received a takeover offer from Aetna (AET 132.60, +5.09).