Maryland News Desk

Stocks rebound after steep sell-off: Dow up 50

Stocks rebound after steep sell-off: Dow up 50

Stocks are rebounding a bit Tuesday as the Dow partially bounced back from its biggest drop in two years amid growing chaos surrounding the Greek debt crisis. Investors continue to eye the latest headlines on Greece as the country faces a midnight default deadline and last-minute negotiations continued. “Greece is still in focus,” said Paul Hickey, co-founder of Bespoke Investment Group.

The Dow Jones industrial average is up about 45 points, or 0.3%, and the Standard & Poor’s 500 index added 0.4%. The Nasdaq composite index jumped 0.7%. A closely watched exchange traded fund that invests in Greek shares but trades in the U.S. was up about 6% after plunging around 20% the day before. The good news is there doesn’t seem to be a repeat of the violent price action in global markets yesterday, when the Dow cratered 350 points in its biggest slide since June 2013. Asian markets rebounded but Europe saw another day of losses. Germany’s DAX index was down 1.3% after suffering a 409-point drop Monday in its worst drop since October 2008. France’s CAC 40 index dropped 1.6% and Britain’s FTSE 100 fell 1.5%.

The Greek government confirmed Tuesday that it would not pay the $1.7 billion it owes to one of its creditors, the International Monetary Group, before the midnight (5 p.m. ET) deadline. That non-payment puts Greece in default and marks an end to its bailout program. There has been talk from both sides that the door to a deal remains open as Greece requested a third bailout in last-ditch effort to reach an agreement. In the meantime, global investors await Sunday’s key referendum when the Greek people will cast their vote on whether they want to accept its creditors onerous terms for another bailout or whether they say no and risk exiting the eurozone.

Yesterday’s global stock market rout was due in large part because investors were caught by surprise by Greek Prime Minister Alexis Tsipras decision to put the latest bailout vote to the people. Wall Street is now awaiting polling data from Greece to get an idea of whether the Greek people will vote “yes” and agree to a deal or cast a “no” vote, which would likely rile markets more as it would further complicate matters and create further confusion about Greece’s future in the 19-nation eurozone.

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