Calm Holds for Ninth Week in U.S. Stocks Amid Greece Impasse

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For stock investors bored by the longest stretch of weekly calm in 22 years, there’s always next week.

The Standard & Poor’s 500 Index ended the five days lower by 0.4 percent as the Greek crisis dragged on without resolution and economic data did little to change perceptions on the strength of the economy. The result was the ninth straight week with a move of less than 1 percent, the longest streak since 1993.

That leaves it to next week. Greek Prime Minister Alexis Tsipras called a July 5 referendum on whether his country should accept creditors’ demands, throwing into doubt future financing after the current bailout ends on Tuesday. There will also be the U.S. monthly jobs report to jolt equities from their two-month torpor before investors head to the beach for the July 4 holiday weekend.

“We need to get some better news for the market to go up,” said Paul Zemsky, head of multi-asset strategies at Voya Investment Management LLC, which oversees $218 billion. “Over the summer, I think the market could break to the upside.”

Volume on U.S. exchanges was on pace for one of the slowest weeks this year until late Friday, when FTSE Russell’s index reconstitution touched off a frenzy of trading. Some 4 billion shares changed hands in the final 10 minutes of trading, after daily volume in the first four sessions averaged 5.8 billion shares.

While broad measures of U.S. equities churned in place, there were some signs of life. Semiconductors tumbled 4.4 percent after the largest U.S. memory-chip maker issued a disappointing sales forecast. The S&P 500 flirted with a record high as a flurry of deal talk sent health-care shares higher, and a Supreme Court ruling boosted hospital stocks.

Greek Crisis

Yet that was all background noise amid the cacophony coming out of Europe, as hopes for a Greek deal were raised and then dashed. Euro-area finance chiefs poured scorn on the Greek government’s decision to call a referendum on the terms of the country’s bailout and said the door was closing to any further discussion on resolving a standoff over aid.

The lack of any resolution during the week left traders hamstrung, with the S&P 500 heading for a monthly decline of 0.3 percent. The index is up 1.6 percent for the quarter.

“Greece is still front and center, but it’s more about short-term noise,” said Anthony Valeri, a market strategist with LPL Financial Corp. in San Diego. “There’s a lot more for the markets to chew on in the next few weeks.”

Data Watch

While the second-quarter earnings season unofficially kicks off July 8, payrolls data for this month, due Thursday, will give investors insight on the health of the labor market and the rate of wage inflation as the Federal Reserve considers the timing and pace of interest-rate increases.

A report June 24 showed the world’s largest economy shrank less in the first quarter than previously estimated, aided by a bigger gain in consumer spending. Other data in the latest week showed previously owned homes sold at the fastest pace since 2009, while purchases of new homes surged and consumer confidence climbed to a five-month high.

The Chicago Board Options Exchange Volatility Index climbed 0.4 percent to 14.02 in the five days, closing at a June low of 12.11 on Tuesday before rebounding.

Seven of the the 10 main groups in the S&P 500 retreated in the week, with utility shares dropping 2.4 percent. The rate on 10-year Treasury notes spiked more than 20 basis points in the period, weakening the appeal of power companies that have high dividend yields.

Chips, Hospitals

Semiconductors in the S&P 500 sank 4.4 percent as a group to end at the lowest since April 6. Micron Technology Inc. tumbled 20 percent after it issued a sales forecast that missed analysts’ estimates on weaker demand for personal-computer components. Intel Corp. dropped 3.3 percent.

The decline in chipmakers led the Nasdaq Composite lower by 0.7 percent, its worst week since May 1. The gauge ended the week on a three-day losing streak after closing June 23 at an all-time high.

Health-care stocks climbed 0.3 percent. Cigna Corp. jumped 8.2 percent, touching an all-time high, after rejecting a $47 billion takeover bid from Anthem Inc. Aetna Inc. jumped 4.8 percent after people with knowledge of the matter said the second-largest U.S. health insurer by market value is close to acquiring Humana Inc.

Hospital shares rallied after the Supreme Court upheld a core component of President Barack Obama’s health-care law. Tenet Healthcare Corp. surged 9.8 percent to lead gains, while HCA Holdings Inc. and Universal Health Services Inc. rallied at least 5.9 percent.

(Updates with Greece developments from third paragraph.)
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