The bulls didn’t get the results they were hoping for on Monday despite the positive result from the Greek elections Sunday night. Wall Street and the world wanted the pro-eurozone New Democracy party to win, and they did, but not by much.
The narrow margin of victory was not all good news. The New Democracy will have to team up with a minority party to gain a pro-bailout majority in Parliament. Greece has said this will likely in the next few days but this still doesn’t help the country’s long-term fiscal stability. Maybe the market figured that out yesterday.
The Dow fell 25 points, or 0.2%, to end at 12,741. The bulls made a push towards resistance at the 12,800 level but couldn’t keep any momentum. Support is at 12,600.
The S&P 500 added 2 points, or 0.1%, to close at 1,344. The index traded to a low of 1,334 at the open but was able to push 1,348 intraday. The bulls are trying to crack resistance at 1,350 while the bears will try to push 1,325-1,300 this week.
The Nasdaq gained 22 points, or 0.8%, to settle at 2,895. Tech traded to a high of 2,903 and cleared 2,900 before finishing just below this level. The low of 2,853 was just above short-term support at 2,850.
We mentioned Spain’s borrowing rates for 10-year bonds rose above 7% yesterday and this will be a story to watch all week. Spain’s borrowing costs are at a level that’s unsustainable and near the same rates that forced Portugal, Ireland, and Greece to seek a bailout. This morning, borrowing rates for Spain’s 12-month bond topped 5%.
Futuresare pointing towards a slightly higher open and look like this: Dow (+31); S&P 500 (+4), Nasdaq (+12).
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