Stocks posted a small loss on Thursday, but it looked earlier to be worse than that before news of a plan to save Greece from a debt default lifted the market for a second-half rally.
The Dow Jones Industrial Average slipped 42 points to 12,249, the S&P 500 fell 2 points to 1313, while the Nasdaq eked out a 4-point gain to 2773.
After little more than two hours of trading on Thursday, however, the outlook was far more bleak: the Dow moved below 12,200 for the first time since April 14, and it appeared certain that stocks would rack up a two-day loss of at least 3% following Wednesday’s selloff, which was the largest since mid-March.
On the other hand, once Asia had its selloff reaction to what had happened the previous day with U.S. stocks, it did seem that a limit to further selling was in order. Oil prices dipped below $100 a barrel early Thursday, but moved higher well before the news about Greece.
Oil ended up with a slight gain to finish at $100.40 a barrel.
Similarly, bonds were rallying before the sudden turn in stocks, but with investors feeling emboldened by the news from Greece, the yield on the 10-year note pushed back up to 3.03%.
The tentatively good news regarding Greece also had investors embracing much of Europe — the iShares MSCI Spain Index Fund (NYSE:EWP) gained 1.9%, and the iShares MSCI Italy Index Fund (NYSE:EWI) added 1.3% — while food and agricultural commodities also outperformed.
Financial stocks also outperformed on Thursday — the Financial Select Sector SPDR (NYSE:XLF) exchange-traded fund managed to finish 0.1% higher, which isn’t a mind-blowing rally but offers relief to bulls who saw the sector fall to five-and-a-half-month lows on Wednesday.
Of course, another contributor to Thursday’s push-and-pull market was the looming jobs report on Friday morning, which, of course, will have major ramifications for investors’ perceptions of economic health and inflation (or lack thereof). Economists currently expect that 169,000 jobs were added in May and that the unemployment rate remained flat at 9%.
With the S&P 500 back to a level that served as a consolidating range in mid-April, a huge downside surprise and subsequent selloff could ultimately see stocks approaching their break-even level for the year.
