Wall Street Closes Flat Despite GDP Report and News in Greece

European shares opened and closed higher on Thursday, buoyed by good quarterly results from companies such as Siemens, Nokia and Deutsche Bank, which gave a new sign of economic recovery in the euro area. Further, Japan’s Nikkei 225 rebounded today to a near one-week high after investors were encouraged by the optimistic Federal Reserve assessment of the U.S. economy, and strong earnings reported from companies such as Hitachi and Nintendo.  Meanwhile, Wall Street closed with little change amid quarterly results that did not arouse the enthusiasm of investors.

Stocks closed with little gains, the Dow Jones is down 0.03%, the S&P 500 is completely flat while the Nasdaq advances 0.33%.

U.S. GDP Report. The U.S. economy was strengthened in the second quarter. The second quarter GDP is up 2.3% year on year from April 2014 to June 2015, down from 2.6 % expected. Most of the acceleration in GDP was due to a number of factors such as increased consumer spending on big-ticket items (new cars and trucks) and a stronger housing market.

Greece with Little Support. The International Monetary Fund has said it cannot participate in the third bailout program in favor of Greece. Two are the reasons, first of all, the high debt levels and second the lack of concrete measures to disqualify the country to receive funding from the Institution. Although IMF officials will be involved in the negotiations of the bailout program, the IMF may not decide if it will provide financial resources for the rescue and the decision could take place in a year.  Thus, it seems likely that the IMF decide whether to participate in a second phase after Greece has a plan of reforms.

LinkedIn (LNKD) Shares with Extreme Volatility. After the company unveiled its quarterly results, shares jumped to almost 12% but then plunged to more than 2% in after-hours trading. Moreover, Facebook (FB) reduced its losses and closed the day down by 1.84%.

Gold Trading Low. Investors shorting gold have another day of gains as prices have continued to fall. Gold future prices were trading at around $1,088 an ounce, one of the lowest values for 5 years.

Friday Movers. Companies such as Ameren (AEE), Exxon Mobil (XOM), Legg Mason (LM) and Chevron (CVX) among others will report its quarterly results tomorrow. Investors should keep an eye on these companies in Friday’s trading session.

Published on Jul 30, 2015
By Omar Venerio
Capital Markets, Derivatives and Financial Management Professor, Master in Finance and CFA candidate. I am an independent trader of stocks and options and passionate about the stock market.

Copyrighted 2016. Content published with author's permission.

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