U.S. Stocks Trim Losses on Report Greece Will Get Rescue Payment
U.S. stocks trimmed losses following a report that Europe’s bailout fund will pay the next installment of aid to Greece, easing concern that the nation won’t qualify for rescue funds after electing political leaders opposed to austerity measures.
The Standard & Poor’s 500 Index slipped 0.2 percent to 1,361.29 at 1:45 p.m. in New York, paring losses after Reuters reported that the European Financial Stability Facility will pay the 5.2 billion euro tranche of aid.
“We could see the U.S. market do better with some positive developments in Europe,” said Peter Jankovskis, who helps manage about $2.9 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “Corporate earnings have continued to be good. There’s reason to be encouraged about American stocks.”
Earlier losses, which sent the S&P 500 down as much as 1.5 percent, were triggered by concern Greece’s bailout is unraveling as the nation struggles to form a coalition government. Weekend elections resulted in a parliament divided over whether to implement austerity measures needed to qualify for rescue funds. Concern about Europe’s debt crisis helped drive the S&P 500 down almost 3 percent so far in May.
Some investors also said the market trimmed losses as the S&P 500 traded near 1,350, a so-called support level for traders. Peter Jankovskis, at Oakbrook Investments, said that there are reasons to be encouraged about the U.S. market as earnings grow. About 70 percent of S&P 500 companies that reported results since the start of the earnings season have topped projections, according to data compiled by Bloomberg.
“We could see the U.S. market resume its rally with some positive developments in Europe,” said Jankovskis, who helps manage $2.9 billion in Lisle, Illinois. “While people are relieved that Merkel has expressed an interest in keeping Greece in the euro, nobody is saying that they are going to let Greece have the money and do what they wish. That’s a positive.”
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