The Standard & Poor’s 500 Index was little changed after erasing a drop of 1.3 percent, as a rally among energy and technology shares offset concern over China and Greece that sparked a global equities selloff.
Citigroup Inc. and Bank of America Corp. dropped at least 0.6 percent as financial shares declined, while Verizon Communications Inc., Merck & Co. and AT&T Inc. led the Dow Jones Industrial Average lower. Newmont Mining Corp. jumped almost 5 percent as gold futures rallied.
The S&P 500 fell less than 0.1 percent to 2,059.82 at 4 p.m. in New York after yesterday sliding the most in seven weeks. The Dow average dropped 51.28 points, or 0.3 percent, to 17,801.20. The Nasdaq 100 Index added 0.4 percent and the Russell 2000 Index of small companies rallied 1.8 percent, as energy companies in the index rallied the most in three years.
“You had some real change in the situation in both China and Greece and yet that wasn’t enough to keep the market down, that’s very bullish,” Matt Maley, equity strategist for Miller Tabak & Co. in Newton, Massachusetts, said via phone. “With the Russell and Nasdaq up on the day, this is the type of thing that hopefully will get us to break out of the tight range we’ve been in the last week or so.”
Global equities fell after China said certain lower-rated bonds can no longer be used as collateral for some short-term loans, sparking a selloff in riskier debt that spread to government notes and stocks. Stocks in China tumbled the most since 2009 and the MSCI All-Country World Index dropped 0.5 percent. About 7.3 billion shares traded hands on U.S. exchanges, 7.3 percent above the three-month average.
The Stoxx Europe 600 Index lost 2.3 percent as Tesco Plc slumped, energy companies extended losses and U.K. manufacturing output unexpectedly fell for the first time in five months. Meanwhile, Greece’s move to bring forward the process for choosing a new head of state risks triggering parliamentary elections that could put in power a party that opposes the terms of the nation’s bailout by the European Union.
Oil touched a five-year low yesterday, stoking concern that lower demand points to a slowing global economy.
“There was a bit of baby with the bathwater this morning so you’re seeing some quality rally with other stuff staying down,” Benjamin Dunn, president of Alpha Theory Advisors, which advises hedge funds with about $6 billion in assets, said in an e-mail from Crested Butte, Colorado. “If you think the secular tailwinds and positive growth in the U.S. is for real then you shrug off China.”
The S&P 500 has rebounded 11 percent from a low in October amid speculation the U.S. economy is strong enough to withstand a slowdown overseas and tighter monetary policy after the Fed wound up its asset-purchase program.
The index dropped 0.7 percent yesterday, following a seventh straight weekly gain that pushed the gauge to a record as better-than-estimated payrolls data increased optimism in the economy. The gauge ended the week trading at 17.3 times its members’ projected earnings, the highest valuation since 2009. The Dow also reached a record last week, climbing within 10 points of 18,000 before retreating.
The Chicago Board Options Exchange Volatility Index, the gauge of options prices known as the VIX, climbed 4.8 percent to 14.89, after jumping 20 percent yesterday, the most since October.
Five of 10 major industries in the S&P 500 fell, with telephone companies dropping 3.2 percent as a group and health-care shares losing 0.4 percent. Energy shares added 0.9 percent, after retreating 5.8 percent over the previous three days.
The Russell 2000 Energy Index surged 6.1 percent, the most since November 2011, rebounding from a 7.3 percent selloff yesterday.
Citigroup Inc. fell 0.9 percent to $55.85 after Chief Executive Officer Michael Corbat said the company will report $2.7 billion of legal costs in the fourth quarter and $800 million in expenses tied to headcount and real estate.
Bank of America declined 0.6 percent to $17.56 after the second-biggest U.S. bank said it expects trading revenue to decline this quarter from the previous three months and a year earlier.
Verizon Communications Inc. slipped 4.1 percent, the most since August 2011, after saying phone discounts and promotions will hurt profitability at its wireless business.
Merck & Co Inc. lost 3 percent to $60.01, ending three days of advances. Cubist Pharmaceuticals Inc., the drugmaker being bought by Merck for $8.4 billion, lost a bid to block Hospira Inc. from offering a generic version of its top-selling Cubicin treatment for flesh-eating infections beyond 2016.
Lululemon Athletica Inc. advanced 6.2 percent to $47.73 after Wells Fargo Securities analyst Paul Lejuez raised his rating on the clothing company to “outperform” from “market perform.”
Newmont Mining Corp. jumped 4.9 percent to $20.01 as gold futures rose to the highest in six weeks. The global selloff in equities revived demand for the metal as a haven.
T-Mobile US Inc. dropped 8.3 percent to $25.85 after offering to sell as many as 17.4 million new convertible shares.
H&R Block Inc. fell 5 percent to $32.34 after the provider of tax services posted a larger-than-estimated loss for the second quarter, while sales for the period also disappointed analysts.