Market Update & Important Indicators
U.S. stocks turned slightly lower Wednesday afternoon as investors eyed developments in Greece ahead of a parliamentary vote on a proposed bailout. Greece and its creditors reached a bailout deal Monday, but the fresh aid is contingent on the cash-strapped country implementing deep austerity and economic overhauls. The Greek Parliament is expected to approve the measures on Wednesday. Financial stocks rose the most in the S&P 500. Strong earnings from Bank of America Corp. on Wednesday and J.P. Morgan Chase & Co. on Tuesday helped buoy the sector. Bank stocks also stand to benefit from higher interest rates as they can charge more on loans. Back in the U.S., investors largely brushed off Federal Reserve Chairwoman Janet Yellen's remarks to Congress. She reiterated the central bank was on a path to raise short-term rates this year as the domestic economy improves even amid global headwinds.
European stocks notched a sixth-consecutive session of gains Wednesday ahead of a vote in the Greek parliament that could pave the way for a desperately needed international bailout for the cash-strapped country. European stocks have been on an upward trajectory since late last week, with support this week largely stemming from the tentative Greek deal reached Monday, which will provide Athens with a fresh bailout as long as it implements deep austerity and economic overhauls. The country's parliament is broadly expected to approve the measures on Wednesday, but strategists and investors remain cautious, saying the crisis is far from over.
Stocks in China fell a second straight day Wednesday, with a government-engineered recovery proving fleeting and surprisingly strong growth data dimming hopes for more stimulus. Some 696 mainland firms remain suspended, according to FactSet. The majority of firms returning to trade Monday and Tuesday hit regulators' upward daily limit of 10%, whereas only a fraction of those did on Wednesday. China's annualized growth held steady at 7% in the second quarter, according to official data Wednesday, a level few economists expected given signs that Beijing's policies to get the world's second-largest economy back in gear had fallen short.
Copper futures closed lower on the London Metal Exchange on Wednesday, as the dollar firmed against a range of currencies. Other base metals on the LME finished mixed. Gold was lower, trading at $1,149/oz. The AUD is buying US$0.738.
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