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Overnight Markets: US stocks pare losses late on Europe optimism
Equities gained in the final hour of trading amid speculation European leaders were nearing a deal to halt contagion from the debt crisis.
Wall Street declined on Thursday but pared losses in the final hour of trading amid speculation European leaders were nearing a deal to halt contagion from the debt crisis.
The Dow Jones industrial average dropped 25 points, or 0.2%, to 12,602. The Standard & Poor's 500 Index shed three points, or 0.21%, to 1,329. The Nasdaq Composite Index lost 26 points, or 0.9%, to 2,849.
Shares declined earlier in the session after a divided US Supreme Court supported the centerpiece of President Barack Obama's healthcare overhaul law. The law, which requires that most Americans obtain insurance by 2014 or face a penalty, is seen as a hallmark of a business unfriendly administration.
Equities later pared losses as EU leaders began the two-day summit. Finance officials were working on urgent measures to reduce financial market pressure on Spain and Italy, which may prove to be more difficult to rescue than smaller nations in the eurozone.
Major insurers such as Aetna Inc, which face more regulation, ended lower, while other companies reliant on Medicaid, such as Wellcare Health Plans, rose. Aetna ended down 2.7% and Wellcare jumped 8.8%.
Shares of JP Morgan Chase fell 2.5% after a New York Times report projecting that losses from a recent botched trade could reach $9 billion. US-traded shares of Barclays slumped 12.1% after Britain said it will investigate possible crimes over attempts to manipulate lending rates. Lloyds fell 3.6% in New York.
Bank of America Corp slipped 0.4% after Citi Investment Research posted a bearish note on several US banks including Bank of America Corp. Goldman Sachs edged up 0.2%.
After the close, Nike Inc plunged 10% after the footwear maker posted a quarterly profit that missed Wall Street estimates.
After the market close, European Union President Herman Van Rompuysaid leaders agreed to spend €120 billion to stimulate growth.
In Asia, equities surged on Friday after EU leaders meeting in Brussels agreed to ease repayment rules to Spanish banks and make it easier to recapitalise the region’s troubled lenders.
The MSCI Asia Pacific Index climbed 1.5% to 117 as of 1:06 p.m. in Tokyo. Hong Kong’s Hang Seng Index gained 1.9% and Japan’s Nikkei 225 added 1.1%. China’s Shanghai Composite Index and South Korea’s Kospi climbed 0.9%. Australia’s S&P/ASX 200 rose 1.1%.
In company news, Westpac Banking rose 2.2%, while Toyota Motor advanced 2.3%, leading gains among Japanese exporters.
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by Selin Bucak on May 27, 2015 at 07:00