S&P ends almost flat; investors shrug off Europe

Mon May 7, 2012 4:25pm EDT
 
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By Angela Moon

NEW YORK (Reuters) - Investors brushed off Europe's election results, as the S&P 500 rebounded from early losses to end nearly unchanged on Monday, despite the uncertainty surrounding the euro zone's ability to tackle its debt crisis.

U.S. financial stocks, normally highly sensitive to events that could unsettle the euro zone's fiscal stability, were not only the biggest gainers, but had the heaviest volume.

The S&P 500 financial sector index .GSPF rose 0.7 percent. Bank of America (BAC.N: Quote) shares shot up 2.8 percent to $7.96 and Goldman Sachs (GS.N: Quote) gained 1 percent to $110.04.

"One positive thing we are seeing out of the elections and we are hearing from the ECB chairman is a focus on growth and that austerity measures alone are not going to get them out of this crisis," said Sean Lynch, global investment strategist for Wells Fargo Private Bank in Omaha, Nebraska.

"So if there are more growth-oriented measures, that could help the banking system and could be a positive for the economy as well."

Analysts pointed to a potential government bailout for troubled Spanish bank Bankia BKIA.MC as a boost for the sector.

The Dow Jones industrial average .DJI slipped 29.74 points, or 0.23 percent, to 13,008.53 at the close. But the Standard & Poor's 500 Index .SPX inched up just 0.48 of a point, or 0.04 percent, to 1,369.58. The Nasdaq Composite Index .IXIC added 1.42 points, or 0.05 percent, to 2,957.76.

The election results from Europe initially roiled futures markets on Sunday night, but markets were able to rebound. Greeks voted to cast out ruling parties in elections on Sunday, dealing a blow to the fragile political consensus that has kept Europe's currency bloc intact through more than two years of crisis.   Continued...

 
Traders work on the floor of the New York Stock Exchange May 7, 2012. REUTERS/Brendan McDermid