You are here

US: Stocks rise as Greek default looms


[NEW YORK] US stocks finished moderately higher Tuesday, recovering some of the prior session's losses, as Greece edged closer to a debt default.

The Dow Jones Industrial Average added 23.16 points (0.13 per cent) at 17,619.51.

The broad-based S&P 500 rose 5.48 (0.27 per cent) to 2,063.12, while the tech-rich Nasdaq Composite Index gained 28.40 (0.57 per cent) at 4,986.87.

US stocks were in positive territory virtually the entire session, in part due to sentiment that the market was oversold after Monday's rout.

Analysts also expressed greater optimism about Greece after Greek officials made a last-minute effort to extend its bailout hours before its expiry and a possible IMF default.

Eurozone finance ministers declined that request, but will continue talks Wednesday after Athens asked for a new aid plan, officials said.

"There's a little bit of optimism today," said Dan Greenhaus, chief global strategist at BTIG.

"It's a fluid situation, but what today shows, like yesterday, is that these Greek headlines are going to drive the action." US professional services company Towers Watson sank 8.8 per cent on news it will combine with insurance broker Willis Group in a deal with an implied equity value of about US$18 billion. Willis Group jumped 3.3 per cent.

Deutsche Bank called the deal surprising and said it implies Towers Watson will rely less on other growth plans that had been discussed, such as in running private health exchanges. Towers Watson investors are "somewhat taken aback," Deutsche Bank said.

Packaged food company ConAgra Foods gained 0.7 per cent as it announced plans to divest its private-brands business, which includes hot and ready-to-eat cereal, retail bakery goods and other items. ConAgra chief executive Sean Connolly said he concluded the "time and energy" needed to turn around packaged foods "represent a suboptimal use of our resources." Biopharmaceutical company Juno Therapeutics shot up 15.2 per cent on its announcement that it reached a 10-year partnership with Celgene to commercialise Juno's oncology and cell therapy product candidates. Celgene rose 0.7 per cent.

Twitter jumped 5.9 per cent after a Canaccord Genuity note said a deal with Google to make Twitter messages more searchable would boost use of the microblogging service.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.36 per cent from 2.32 per cent Monday, while the 30-year advanced to 3.13 per cent from 3.09 per cent. Bond prices and yields move inversely.