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The Markets This Week

June 17, 2015 | Weekly Commentary

Stocks finished a seesaw week in which the sizable gains notched by Thursday evaporated Friday. Still, the major indexes finished slightly higher and snapped losing streaks.

After rising nearly 1%, boosted by bullish retail and jobless data, markets were whacked by a breakdown in talks between the International Monetary Fund and Greece over the country’s bailout. The IMF left the negotiating table Thursday. Greece has a June 18 repayment deadline, or it faces default and possible exit from the monetary union. The last nail in the rally’s coffin came from Congress’s vote Friday to defeat an important part of the Obama administration’s proposed fast-track Pacific trade bill.

The Dow Jones Industrial Average rose 49 points, or 0.3%, on the week, to 17,898.84. The Standard & Poor’s 500 index inched up one point to 2094.11. The Nasdaq Composite fell 17, or 0.3%, to 5051.10.

Although Greece is a small country and its economic plight is well known, a default “can scare people,” says Thomas Lee, head of research at Fundstrat Global Advisors. There might be some impact on risk appetite or on a particular bank, says Lee. But, he adds, “it doesn’t pose the same risk it did three years ago.”

Christopher Hyzy, chief investment officer of U.S. Trust Bank of America Private Wealth Management, says big investors are moving money from fixed-income assets to cash. A bullish Hyzy says “…that cash should go into equities once the data show there is no worry over economic growth.”

(Source: Barrons Online)

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