Daily Insight

U.S. stocks started the month off on a high note, propelled by a number of acquisitions as Prudential will buy one of AIG’s crown jewels (their Asian life insurance business) and two pharmaceutical/biomedical deals that juiced mid and small-cap stock indices.

Most overseas bourses performed well the night before, which also offered a boost to the U.S. market, on the weekend’s news that the EU is readying a Greek bailout. Finance ministers will continue to state that they’ll hold Greece’s feet to the fire with regard to austere budget constraints, but as the Greek government get closer to the necessary bond sales needed to roll maturing debt the EU will remove this rhetoric even if the German populace is steadfastly against a bailout – Germany being the EU’s stalwart and major force in the bailout.

Consumer discretionary shares led the broad market higher after the latest personal spending data came in a touch better-than-expected. Utilities, which have had an especially hard time since the end of 2009, was the second-best performing S&P 500 sector. Information technology and basic material shares rounded out the best performing groups.

Financials were the day’s relative loser after HSBC, Britain’s largest bank, reported setting aside higher provisions to guard against a rising non-performing loan count.
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Brent Vondera, Senior Analyst