U.S. equities traded lower on Wednesday, June 24, as discouraging developments in the Greece debt crisis weighed on investor sentiment.
Greece’s government rejected a proposed deal from international creditors, which analysts believed represented the last hope for reaching an agreement. Negotiations are continuing in Brussels. The two sides have until the end of the month to reach a deal before Greece defaults on its upcoming payment to the International Monetary Fund (IMF).
The news sent the S&P 500 Index off 0.47% in early afternoon trading. The NASDAQ Composite briefly turned higher mid-morning. However, by 1:00 p.m. E.T., the technology-heavy index was trading lower as well.
Top Market News Today
Tsipras Says “No Deal” with Creditors
Creditors rejected the Greek government’s plan to end its financial crisis while offering a counterproposal. Following the news, European markets turned lower with the Athens Stock Exchange down 3.3% and the German DAX Index falling 1.2%.
U.S. Economy Better Than Expected
The final read on gross domestic product (GDP) data showed a decline of 0.2% during the first quarter, in-line with analysts’ projections and above a previous estimate of a 0.7% contraction. The improved reading supports the thesis that the economy is improving and backs the Federal Reserve’s case for raising interest rates later this year.
Strong Dollar Eats Into Profits
The strong U.S. dollar weighed on corporate earnings, which were weaker in the first quarter than analysts expected. Moreover, after-tax profits dropped 8.8% in May.
Stocks to Watch
Citigroup Inc. (NYSE/C)
Deutsche Bank cut its rating on the U.S. banking giant to “hold” from “buy,” pointing to a hefty valuation and a lack of short-term stock catalysts. Citigroup shares dropped 1.25% to $56.67 following the announcement.
Applied Materials, Inc. (NASDAQ/AMAT)
Goldman Sachs added Applied Materials, Inc. (NASDAQ/AMAT) to its “conviction buy” list, citing the company’s increasing focus on its core business and favorable product cycle. Shares of the semiconductor equipment maker rose 1.1% to $20.18.
Netflix, Inc. (NASDAQ/NFLX)
Carl Icahn sold off his entire stake in Netflix. The billionaire hedge fund manager announced the move on Twitter on Wednesday: “Sold the last of our [Netflix] today,” Icahn tweeted, “Believe [Apple Inc.] currently represents same opportunity we stated [Netflix] offered several years ago.”
Lennar Corp. (NASDAQ/LEN)
The country’s second-largest home builder reported a better-than-expected jump in quarterly profits, as it sold more homes at higher prices across the United States. The stock was the top percentage gainer on the S&P 500 on Wednesday morning (June 24), up as much as seven percent to a nearly three-month high.
Freeport-McMoRan Inc. (NYSE/FCX)
The mining company is spinning off its energy division. On Wednesday, the company filed for an initial public offering (IPO) of up to $100 million in common shares. The unit plans to list on the New York Stock Exchange as Freeport-McMoRan Oil & Gas under the ticker symbol “FMOG.”