NEW YORK |
NEW YORK (Reuters) – U.S. stocks edged up in volatile trade on Tuesday after the prior session’s selloff, but gains were seen as fragile before a European Union summit on the debt crisis this week.
All three major U.S. stock indexes rose after seesawing between gains and losses throughout morning trade. On Monday, the SP 500 fell 1.6 percent, creating buying opportunities, but concerns raised by a jump in Spanish borrowing costs and weak U.S. consumer sentiment data kept investors away from stocks in morning trading.
“This is a classic exhaustion rebound. The selling intensity was pretty high yesterday, and technically, we were due for a short-term rebound,” said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.
“But these gains are really unsustainable. I think we have entered the bear market cycle already, and these (gains) could disappear any minute.”
Spain’s short-term borrowing costs nearly tripled at auction when the country sold 3.08 billion euros of its short-term debt, as the Treasury paid the highest rates to sell the paper since November.
Trading is expected to be volatile ahead of a two-day summit of European Union leaders that begins Thursday. Although investors do not have high hopes, any progress made at the meeting in terms of heightening cooperation to tackle the region’s 30-month long debt crisis could bring back appetite for risky assets.
U.S. consumer confidence fell to its lowest level in five months in June, the Conference Board industry group said, but separate housing data showed home prices picked up for a third month in a row in April, suggesting recovery is gaining traction in the sector.
The Dow Jones industrial average .DJI was up 30.99 points, or 0.25 percent, at 12,533.65. The Standard Poor’s 500 Index .SPX was up 6.39 points, or 0.49 percent, at 1,320.11. The Nasdaq Composite Index .IXIC was up 15.71 points, or 0.55 percent, at 2,851.87.
Finance chiefs of the euro zone’s four biggest economies will hold last-minute talks in Paris on Tuesday evening to discuss managing the crisis.
According to a document prepared for the meeting, European leaders will discuss specific steps toward a cross-border banking union, closer fiscal integration and the possibility of a debt redemption fund.
JPMorgan Chase Co (JPM.N) rose 1.4 percent to $35.83 as one of the top boosts to both the Dow and SP after Goldman Sachs added the bank to its conviction buy list.
Goldman also downgraded Morgan Stanley (MS.N) to “neutral” from “buy,” and removed the stock from its conviction buy list, saying earnings could be hurt by muted capital markets activity. The stock edged up 0.9 percent to $13.60.
Rupert Murdoch’s News Corp (NWSA.O) said it was considering splitting into two publicly traded companies, and sources familiar with the matter said publishing would be separated from entertainment. Its shares jumped 6.2 percent to $21.35.
(Reporting By Angela Moon, editing by Kenneth Barry)