The major averages ended with large gains on Friday as investors were speculating on a favorable outcome of the Greece elections on Sunday. The S&P 500 managed to close 1.03% higher. The Dow Jones Industrial Average gained 0.91% while the Nasdaq ended 1.29% higher.
Markets in Europe ended the week with large gains as investors were anticipating a favorable outcome from the Greece elections. The German DAX-30 gained 1.48%. The Italian MIB gained 2.34% after Prime Minister Mario Monti said the country will overcome the economic crisis without outside aid. The Spanish IBEX-35 only managed to gain 0.34% after the index already outperformed in recent days. Despite the uncertain outcome of the Greece elections, markets are entering the weekend full of confidence as rumors surfaced on Thursday that global central banks would intervene in the financial markets in case the left Syriza party would take a lead.
Wall Street Opening
Equity markets opened with small gains and continued to rise during the session despite some bad macro-economic news. The consumer sentiment, measured by the University of Michigan, fell to 74.1 points in June. This compares to a reading of 79.3 in May and expectations of 77.5 point from economists. Industrial production fell by 0.1% in May and capacity utilization fell by 0.2% to 79.0%
Despite the poor macro-economic data stocks continued to gain ground near the end of the session. Investors are speculating on more easing from central banks as signs of an economic slowdown continue to emerge.
II-VI (IIVI) the optical and electronics instrument maker for the industrial, military and aerospace industry fell 12.6% to $16.25 on Friday. The company slashed its outlook for the fourth quarter. II-VI now expects to earn between $0.23 and $0.25 per share on revenues of between $135 million and $137 million. Previously the company expected to earn between $0.27 and $0.31 per share on revenues between $139 million and $142 million. Falling prices and weak demand for tellurium impacted results at the company's chemical unit while softness in bookings hurt the semiconductor unit.
Zynga (ZNGA) the developer of social games rose sharply late afternoon on Friday. Shares rose 10.6% after Goldman Sachs reiterated its buy rating for the shares with a $13 price target. The risk/reward is attractive and the upcoming second quarter results and product announcements could be positive catalysts. Analysts note that user traffic is not as bad as expected. Furthermore speculation rose that Microsoft (NASDAQ:MSFT) might be contemplating a bid for the company.
Expedia (EXPE) the online travel company rose as much as 5% on Friday to all time highs just above the $50 mark. Shares already returned 72% since the first of January and kept on gaining throughout this week even as Lazard cut its recommendation for the stock from buy to hold amidst an "aggressive" valuation.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.