Mid-Day Recap: Equities Close to Erasing All of Last Week’s Losses
US equities were quick out of the gate on Monday morning. In just a few hours stocks have came close to erasing all of last week’s losses. As of 1pm, the NASDAQ is trading 2.16% higher at 2,136, the S&P 500 is up 1.74% to 1,063, and the Dow is up 1.42% to 9,802.
The trigger wasn’t fresh macroeconomic data or a new sign that the economy is recovering. Nor were global markets any help, as shares in China, Japan, and Hong Kong each fell more than 2% on Monday. Instead, investors were doing some bargain buying after the market shed 2.2% last week.
In addition, corporate news provided a boost. Technology shares performed particularly good this morning owing to news that Xerox Corporation would be purchasing Affiliated Computer Services for $6.4 billion, its biggest purchase ever.
Xerox said its sales could triple as part of the deal, while its employee base would double. Investors aren’t certain it’s a good move, as shares of the global printing company are down 17.5% this morning, but the move has allowed other tech shares to climb.
“It’s going to take a Herculean effort to integrate these two companies,” said Peter Falvey, managing director at Revolution Partners, to Bloomberg News. “There is significant execution and integration risk. It’s a very bold bet.”
Outside of equities, the US dollar is mixed this morning, crude oil is up 35 cents to $66.37 per barrel, and yields on the benchmark 10-Year Treasury are down one basis point to 3.32%.
In news from the weekend, Robert Zoellick, president of the World Bank, said the U.S. could lose its status as the globe’s reserve currency. “There is every reason to believe that the euro’s acceptability could grow,” he said in Washington, DC. “Of course, the U.S. dollar is and will remain a major currency. But the greenback’s fortunes will depend heavily on U.S. choices.”
Zoellick also criticized the Federal Reserve for failing to address “risks building in the new economy.”
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