Stocks post third straight day of gains

By Stan Choe

Associated Press

Published: Monday, June 20 2011 6:05 p.m. MDT

FILE - In this file photo taken June 15, 2011, traders Edward McCarthy, left, and William McInerney, right, work on the floor of the New York Stock Exchange. Worries over Europe's debt crisis kept markets on edge Monday, June 20, 2011, following a warning over Italy's credit rating and a failure by eurozone finance ministers to agree an immediate release of bailout funds to Greece.

Richard Drew, file, Associated Press

Enlarge photo»

NEW YORK — Investors largely put aside their concerns about the Greek financial crisis Monday and focused instead on value. Stocks rose broadly after the market shook off its longest weekly losing streak in nearly a decade.

The downturn brought the S&P 500 close to its average level over the prior 200 days. So long as the index doesn't sink far below that level, many technical traders see it as a sign to start buying stocks again. The S&P is now 6 percent below the 2011 high it reached on April 29.

"In the short term, stocks have been oversold, and you're going to get some sort of bounce, whether justified or not, just for technical reasons," said Paul Simon, chief investment officer for Tactical Allocation Group, which has $1.5 billion in assets under advisement.

The S&P 500 index rose 6.86 points, 0.5 percent, to close at 1,278.36. The Dow Jones industrial average added 76.02 points, or 0.6 percent, to 12,080.38. The Nasdaq composite gained 13.18, or 0.5 percent, to 2,629.66.

Health care companies like Aetna Inc. and Humana Inc. rose 1 percent, the largest gain among the 10 industry groups that make up the S&P 500 index. Financial companies like Morgan Stanley, which lost 1.9 percent, were the only group to lose ground.

The S&P 500 notched its third straight day of gains, the longest stretch of increases in the stock market for nearly a month. The index eked out a tiny gain last week, breaking a six-week losing streak driven by concerns that U.S. economic growth would falter in the second half of the year and that Greece's debt crisis would spread. It was the S&P's longest slide since 2002.

Signs that the European financial crisis may be contained helped ease investors' concerns. European Union officials in Luxemburg said Monday that the EU would take steps to prevent Greece's debt problems from affecting other struggling countries like Ireland and Portugal.

European leaders failed over the weekend to agree on releasing more financial aid to Greece, saying the country must first agree to more budget cuts. Greece's recent efforts to slash spending have led to street protests and political turmoil in Athens. The Greek government faces a confidence vote on Tuesday.

Prime Minister George Papandreou's newly-reshuffled government is expected to prevail in the vote, and officials say they expect Greece to get its next installment of emergency loans in July. If Greece were to default, it could trigger losses for the banks that hold Greek bonds and more turmoil in financial markets.

Some analysts say investors are ready to move beyond the Greek crisis and focus on corporate earnings and the U.S. economy.

"There's a little fatigue about hearing about the same problems, and there's no shock factor anymore," said Oliver Pursche, president of Gary Goldberg Financial Services. Traders are now starting to look ahead to the Federal Reserve's two-day policy meeting, which begins Tuesday, and the next round of corporate earnings reports that begin in July, he said.

Analysts expect that operating earnings per share for companies in the S&P 500 index rose 14 percent in the second quarter. They also expect the Fed to keep interest rates at nearly zero, a record low.

Among U.S. companies, PNC Financial Services Group Inc. fell 2 percent after saying it would buy the U.S. retail operations and related credit-card assets of Royal Bank of Canada for $3.62 billion. The deal will make PNC the fifth biggest U.S. bank with 2,870 branches.

Whole Foods Market Inc. gained 2.2 percent after a BMO Capital Markets analyst upgraded the stock following a recent sell-off. And Wal-Mart stores Inc. rose 0.4 percent after the Supreme Court blocked a sex discrimination lawsuit brought against the retailer by a large group of female employees.

Two stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 3.1 billion shares.

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