Talks between Greek and European officials continued to send mixed signals to the markets this week with resolution hopes supporting gains on Monday and Tuesday. Merger and acquisition announcements in the health care insurance sector led to heightened volatility and volumes with the S&P Insurance Select Index rising to 2,645. Month-to-date the index has outpaced the S&P 500 by 2.73%. On the economic front, strong home sales figures led to monetary policy commentary from Fed Governor Powell.
Hopes that Greece may agree to its creditor’s terms helped push Wall Street higher on Monday. The Dow Jones finished 103 points higher at 18,119.78, while the tech-heavy Nasdaq closed at 5,153.97, up 0.72%.
On the economic front, Existing Home Sales figures for May came in at 5.35 million. Analyst expectations were 5.26 million.
- Anthem Inc. (ANTM ) received news that health insurer Cigna rejected their $53.8 billion takeover offer. Both stocks rose off the back of the news. ANTM has a dividend yield of 1.47%.
- Humana (HUM ) stock price came under fire on Monday with analyst M&A concerns pushing the stock 6% lower. HUM has a dividend yield of 0.59%.
- Sonic Corporation (SONC ) reported earnings in line with initial estimates of 36 cents per share. SONC has a dividend yield of 1.20%.
Confirming that an interest rate rise in September was probable, Fed Governor Jerome Powell was complimentary of the U.S. economy and its growth forecasts. Closing at another record level, the Nasdaq finished at 5,160, up a conservative 6 points. The Dow Jones followed with a 0.13% rise. Durable Goods Orders contracted month-on-month with -1.8% recorded. This was in stark contrast to the rise in New Home Sales for the same period.
- Darden Restaurants (DRI ) reported earnings of $105.3 million, or 83 cents per share, for the quarter. This was above analysts’ forecasts. The owner of Olive Garden announced that the company would split with a new real estate investment trust planned. DRI has a dividend yield of 3.09%.
Profit taking and debt concerns pushed the major indexes lower on Wednesday with the Dow Jones finishing at 17,966. Reports that the Greek Prime Minister had condemned a counter proposal sparked fears of a breakdown in talks.
GDP data fell in line with initial forecasts of -0.2.
- Monsanto (MON ) retreated 5.7% with break-even quarterly forecasts disappointing the market. The company announced a 30% uplift in its Q3 earnings. MON has a dividend yield of 1.83%.
- DuPont (DD ) and its spin-off company, Chemours, came under scrutiny on Wednesday with research analysts forecasting a revision in the dividend policy. DD has a dividend yield of 2.96%.
Health care operators welcomed news of Obamacare tax subsidies with the sector rising almost 1% according to the S&P 500 Healthcare Index.
Once again Greek and EU-IMF officials were unable to come to an agreement with investors concerned that a Saturday meeting may also prove unfruitful.
On the economic front, Consumer Spending data was considerably higher than the previous month. Unemployment Claims came in at 271,000.
Dow futures are pointing to a 40-point rise on Friday with volumes expected to be high. Russell’s reweighting is expected to impact index tracking ETFs. Economically, the University of Michigan Consumer Sentiment Index will be released at 10 am with a market reference point of 94.6.
Next week will see earnings reports from: A.Schulman Inc. (SHLM ), Global High Income Fund (GHI ), Investors Real Estate Trust (IRET ), Park Electrochemical (PKE ), Paychex (PAYX ), ConAgra Foods (CAG ), Schnitzer Steel (SCHN ), Star Bulk Carriers (SBLK ), Unifirst Corp. (UNF ), Acuity Brands (AYI ), General Mills (GIS ), International Speedway (ISCA ), and McCormick & Co. (MKC ).
The following economic data will also be released: Chicago PMI and Consumer Confidence on Tuesday; Financial Manufacturing, ISM Manufacturing and Construction Spending on Wednesday; Non-Farm Payrolls, Unemployment Rate, Unemployment Claims, and Factory Orders on Thursday. There is a Bank Holiday on Friday.