By Evelyn Cheng
U.S. stocks opened higher on Tuesday, attempting to bounce from the worst trading day of the year, as investors turned more optimistic on the Greece crisis.
“I think it’s an oversold bounce. … We also had a lot of nervousness (yesterday),” said Adam Sarhan, CEO of Sarhan Capital. “But from a market standpoint you really want to see the bulls step up and buy this dip. If they don’t, then when will they?”
The Dow Jones industrial average quickly added more than 100 points in the open on Tuesday, which marks the end of the second quarter and first half of the year.
Stocks had their worst day for the year so far on Monday, with the Nasdaq plunging 2.4 percent, the Dow Jones industrial average closing below its 200-day moving average and the S&P 500 barely above its average.
“Next support is 2044-2054 based on both the 200-day moving average and the March low,” BTIG Chief Technical Strategist Katie Stockton said in a note. “Our indicators were mostly constructive ahead of the pullback, but the negative reaction to the news out of Greece certainly heightens risk in the near term for the SPX.”
Greece faces a 1.5 billion euro ($1.7 billion) payment due to the IMF at midnight Tuesday.
European stocks came off their lows amid reports in the Greek media on Tuesday that Prime Minister Alexis Tsipras is considering the latest aid proposals from the European Union.
However, German Chancellor Angela Merkel played down any hopes of a last-minute deal with Greece. She said in a Reuters report that she was not aware of any new offer from the European Commission president.
Germany’s Finance Minister Wolfgang Schaeuble said Greece may be able to access a European Union support fund and that he sees the nation staying in the euro zone even if citizens voted against the creditors’ proposals in Sunday’s referendum, Bloomberg reported.
The Greece stock exchange and banks remained closed on Tuesday.
“This temporary noise from Greece will blow over and investors can focus on (good) fundamentals,” said Doug Cote, chief market strategist at Voya Investment Management. “The bond market is indicating that there’s no real concern about Greece.”
He expects Greece will reach an 11th-hour deal with its creditors.
Treasury yields ticked higher, with the 10-year near 2.36 percent and the 2-year at 0.64 percent. The German 10-year bund was slightly lower at 0.79 percent.
The dollar edged higher against major world currencies, with the euro near $1.12.
Domestic data due Tuesday include the Chicago purchasing mangers’ index and the consumer confidence index.
The S&P/Case-Shiller home price index showed a 4.9 percent rise in April.
The major report expected for the week is the nonfarm payrolls report on Thursday, which could shed light on the timing of a rate hike. Markets are closed Friday for the July 4 holiday.
In addition to Greece, investors are eyeing Puerto Rico, where another potential debt crisis is brewing. The commonwealth’s Governor Alejandro Garcia Padilla late Monday said the island needs a restructuring plan for its $72 billion in debt.
Asian stocks rebounded on Tuesday, with Shanghai leaping 5.55 percent amid new supportive measures from the government.
The S&P 500 traded up 15 points, or 0.74 percent, at 2,072, with energy leading all nine sectors higher and utilities the only laggard.
The Nasdaq traded up 37 points, or 0.74 percent, at 4,995.
About six stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 58 million and a composite volume of 141 million in the open.
Crude oil futures for August delivery gained 36 cents to $58.69 a barrel on the New York Mercantile Exchange. Gold futures fell $8.30 to $1,170.70 an ounce in morning trade.
In corporate news, Towers Watson will merge with British reinsurance firm Willis Group in an all-stock merger. Towers Watson shareholders will get about 2.65 Willis shares for each share they now hold, plus a one-time dividend of $4.87 per share in cash. The combined company will be called Willis Towers Watson.
ConAgra—The company behind brands such as Healthy Choice, Hebrew National, and Hunt’s matched Street estimates with adjusted quarterly profit of 59 cents per share, though revenue was below forecasts. ConAgra also said it was taking a new approach to increasing profit margins, and as part of its new strategy, it will pursue a divestiture of its private label business.