NEW YORK (Reuters) – U.S. stocks mostly rose on Monday, led by large technology companies, but trading was choppy as investors kept an eye on rising Spanish bond yields and the push to form a pro-bailout government in Greece.
Shares of eBay (EBAY.O) rose 4.6 percent to $42.56 after KBW started coverage on the company with a an “outperform” rating and a price target of $50.
Facebook (FB.O) shares also jumped, taking their cumulative gains in the last three sessions to about 17 percent.
But markets still took their cue from developments in Europe.
Equity futures rose overnight on news that Greece‘s center-right New Democracy party, which backs Athens’ international bailout plan, is pushing to form a coalition after its narrow victory in Sunday’s election.
However, German Chancellor Angela Merkel said on Monday she does not see any reason to speak about a new aid package for Greece on top of the two already agreed, slashing hopes that Athens would get more time to meet its fiscal targets.
The election results also offered little reprieve from contagion concerns as yields on both Italian and Spanish bonds rose, with Spain’s 10-year yield climbing above the 7 percent mark at which other highly indebted euro-zone nations were forced to seek bailouts.
European authorities have already agreed to a 100-billion-euro rescue for Spain’s troubled banks.
“We don’t know how the Greek government is going to shape out and what reforms they’ll be able to put into place; there’s still considerable uncertainty in Spain about their bank issues,” said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore.
“As we go through this period of indecisiveness … you’re going to see the markets basically whip around in a sideways pattern.”
Last week, U.S. stocks rallied on Thursday and Friday on news that central banks of major economies would take steps to stabilize markets if necessary after the Greek vote. So much of the bullish bias of the election news was priced in. The S&P 500 rose 5.1 percent in the last two weeks.
The Dow Jones industrial average dipped 14.04 points, or 0.11 percent, to 12,753.13. The S&P 500 Index gained 2.51 points, or 0.18 percent, to 1,345.35. The Nasdaq Composite added 24.14 points, or 0.84 percent, to 2,896.94.
An index of energy shares fell 1 percent, with the sector ranking as the S&P 500′s worst performer. U.S. crude futures dropped 1 percent after falling for six of the last seven weeks.
The NAHB/Wells Fargo Housing Market index rose 1 point in June from May to 29, its highest level in five years, but still well below 50, the reading needed to indicate a favorable view.
Still, homebuilders stocks rose and helped the S&P consumer discretionary sector gain 0.7 percent for the day. Pulte Homes shares (PHM.N) rose 3.4 percent to $9.33 and Lennar Corp (LEN.N) added 3.1 percent to $26.69.
European shares erased early gains and closed flat, with the FTSEurofirst 300 index up 0.04 percent.
Facebook (FB.O) struck a deal to acquire Face.com, whose facial-recognition technology has been in use on the social network. Facebook shares shot up 6.5 percent to $31.96.
DSW Inc (DSW.N) plunged 11.2 percent to $52.19 after the footwear retailer gave guidance for its second-quarter and full-year earnings.
(Reporting by Rodrigo Campos; Editing by Jan Paschal)
