On Tuesday, Wall Street ended flat following three straight days of S&P 500 losses though there was a bounce in consumer staples shares. Some analysts believe that the results were the outcome of an abrupt hike in oil prices which failed to boost energy stock prices and demoralized investors.
However, the best performing part of the S&P 500 index were the consumer staples, but some investors believe that this signals a defensive market since consumers still buy essential products in case of market downturn.
Investors seem to play more defensively since there is a lot of uncertainty related to the political situation in Greece and the exact moment when the Federal Reserve would decide to raise interest rates.
Dennis Dick, a market analyst from Bright Trading in Las Vegas, believes that investors pick defensive bets because of concerns that a 5-year streak of gains may be followed by a market correction.
“When you start to see the defensives as your leaders it’s typically getting to the end of our cycle. When I’m seeing the market get more defensive it makes me nervous,”
Mr. Dick added.
Crude prices rose more than three percent due to bullish bets that the oil sector would become even more profitable during the current decline in U.S. stockpiles. But at the end of the trading hours, the energy sector slipped 0.05 despite a 1 percent increase in earlier hours.
Matthew Kaufler from the Federated Clover Investment Advisors in Rochester, New York believes that people perceive the hike in oil prices as short-termed since OPEC is stubbornly reluctant to change its position on oil production.
The financial sector also saw some gains among widespread optimism that an increase of the U.S. benchmark interest rate which is expected to arrive this year would benefit the sector’s major players.
Greek politicians are aware that they are running out of time before a debt default. So, on Tuesday, the Greek prime minister Alexis Tsipras urged his party colleagues to ally with the government on debt issues. Brussels also grew increasingly nervous over the Greek strategies since talks are nearing a decisive phase.
The Dow Jones index fell 2.51 (0.01 percent) to 17,764.04, Nasdaq plunged 7.76 points (0.15 percent) to 5,013.87, while the S&P 500 saw a gain of 0.87 points (0.004 percent) to 2,080.15.
Following a 1 percent drop on Monday, the dollar fell 0.16 percent against a composite of foreign currencies, while benchmark US Treasuries yields jumped to seven-month records due to a recent flood of debt supply.
Image Source: CS Monitor