Stocks Steady Ahead of Independence Day; Yen Gains Despite Egypt’s Tension; Service Sector Growth Slow
Stocks Unaffected on Egyptian Concerns (Bloomberg)
Stocks barely budged today in response to the political turmoil affecting Egypt and on tomorrow’s Independence Day. Specifically, the S&P 500 Index slipped 0.3 percent and the DOW swung between gains and losses near the 14,930 level. “Today’s data was largely in line with expectations and isn’t having a particularly strong impact on the markets,” Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., said. “Other factors appear dominant. The list is long but the most important factor today seems to be the events in Egypt and the collateral impact on energy markets.”
Investors found refuge in the yen, which was the currency darling today in the market, amid the political unrest unfolding in Egypt, although strong signs had it paring against the dollar in the United States. “International developments are having an effect in the currency market and that’s why the yen is higher,” said Nick Bennenbroek, head of currency strategy at Wells Fargo Securities in New York. “Obviously, the unresolved situation in Egypt and the government resignations in Portugal are an issue. We’re not only seeing some of the G10 currencies weaken, but also emerging market currencies.”
The service sector’s pace of growth slowly grew last month — hitting its weakest level in over three years as new orders nearly stalled; however, a jump in employment growth provided an encouraging sign for the labor market. Moreover, The Institute for Supply Management said today that its services index fell to 52.2 last month from 53.7 in May, which was lower than economists’ prediction of a gain of 54.