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General Mills Inc. (GIS)

Closing Price Change:
$1.82
Closing Price:
$51.82
Market Cap:
$31,190m

US open: Stocks jump on optimism around Greece

01 Jul 15

LONDON (ShareCast) - US equity benchmarks jumped at the opening bell on the back of what some observers described as Greek prime minister Alexis Tsipras´s 'climbdown'.
That came amid a flurry of better than expected economic data, including a widely followed survey of manufacturing activity.

As of 15:39 the Dow Jones Industrials was rising by 0.73% to reach 17,743, the S&P 500 by another 0.72% to 5,027 and the Nasdaq Composite by 0.80% to 5,026.

On Tuesday evening Tsipras sent a letter to the heads of the European Commission, International Monetary Fund and European Central Bank, saying that he would accept all the reforms of Greece's VAT system, with one change. Tsipras requested that a special 30% discount for Greek islands be maintained.

However, one poll published on Wednesday morning showed a majority of Greeks were still supporting a 'no' vote in Sunday´s referendum. Traders were also expectant ahead of Wednesday evening´s Eurogroup meeting and the European Central Bank´s decision on further ELA support to Greek lenders, which was considered unlikely at this stage.

"Of course, [Tsipras´s] acceptance [letter] does come with conditions attached, which is hardly surprising, but they do appear to be watered down compared to previous demands. Tsipras has apparently requested that the VAT discount for islands remain and the rise in the pension age and phase out of solidarity grants to pensioners be delayed, which would represent a sizeable concession given his previous stance on pensions in particular," said Craig Erlam, senior market analyst at Oanda.

"A 'no' vote would bring Greece towards IOUs, with Grexit only possible voluntarily (i.e. with a vote). We remain confident that negotiators will head towards a final GRIN (GReece-IN) solution, as this is the one that bears the lowest cost for creditors, and especially for the Greek people," the fixed income team led by Alberto Gallo at RBS wrote in a research note e-mailed to clients.

Elsewhere, China´s two main stock markets announced they would lower transaction fees by 30% starting on 1 August after stocks fell again overnight.

Oil prices rose, with West Texas Intermediate futures gaining 1.55% to $58.55 a barrel, while Brent crude rose 1.2% to $62.88 a barrel.

Stronger than expected data

The Institute for Supply Management´s purchasing managers´ index for manufacturing rose to a reading of 53.5 - the highest since January - after a print of 52.8 in the prior month. Analysts had been anticipating a reading of 53.2.

Construction spending increased by 0.8% month-on-month in May (consensus: 0.4%).

Consultant ADP´s monthly estimate of private sector payrolls revealed a 237,000 person increase in June, higher than the 211,000 expected by economists.

That followed a 203,000 print for the month before.

Auto sales in focus

In company news, Ford Motor Co and General Motors were likely to be in focus following the release of monthly car sales figures.

General Mills shares were slightly higher in pre-market trading despite the company reporting weaker-than-expected revenue for May.

Insurer ACE surged 12% in pre-market trading after the company said it has agreed to buy rival insurer Chubb.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are end of day values only.

 

Market Data

Currency US Dollars
52 Week High $59.67
52 Week Low $47.28
Shares Issued 601.90m
Market Cap $31,190m

Dividends

No dividends found