Major global market indices saw gains on Wednesday, the day after Greece defaulted on its debt and the same day that Alexis Tsipras, Greece’s prime minister, urged his compatriots to reject an international bailout deal.
And although U.S. equities posted increases, it was not enough to recover the 350 points, or 2 percent, lost on Monday. The Dow Jones Industrial Average closed up 0.8 percent to 17,758 while the S&P 500 gained 0.7 percent to 2,077. The S&P Retailing Industry Group index posted a 0.9 percent increase to finish at 1,147, and the WWD Global Stock Tracker increased 0.8 percent to 112.16.
In the retail, fashion apparel, beauty and luxury sectors, stocks finished the day with varied results, but most issues showed gains of 1 to 2 percent. Target Corp. rose 1.7 percent to $82.99 while TJX Cos. Inc. gained 1.9 percent to close at $67.42. Michael Kors Holdings Ltd. posted a 2.4 percent increase to $43.11 while VF Corp. rose 2.7 percent to $71.59, and Hanesbrands Inc. finished at 2.1 percent to $34.01.
Other top gainers were Tumi Holdings Inc. with a 2.5 percent increase to $21.03 and Iconix Brand Group Inc. with a 2.6 percent gain to $25.61. Stocks that lost ground were Bon-Ton Stores Inc. with a 4.8 percent decline to $4.40 and Land’s End Inc with a 2.8 percent drop to $24.13. Sears Holdings Corp. shed 0.6 percent to $26.53 and Elizabeth Arden Inc. lost 1.8 percent to close at $14.01.
Overseas, the FTSE MIB in Milan rose 2.2 percent to 22,943.64, while the DAX in Frankfurt rose 2.2 percent to 11,180.50. The CAC 40 in Paris gained 1.9 percent to 4,883.19, as the FTSE 100 in London was up 1.3 percent to 6,608.59.
At Wednesday’s start, European markets surged on the belief that perhaps Greece might accept a deal — along with additional austerity measures — and a crisis would be averted. But then talks collapsed after the Greek prime minister seemed to backpedal when he said any offer to creditors is tied to approval for a third bailout.
To be sure, the seemingly inflexible stances of the parties could be just a negotiating tactic before Greek citizens are asked to vote on Sunday on whether they accept or reject the creditor proposals. Currently, nothing suggests that the Eurozone finance ministers are amenable to consider Tsipras’ request for restructuring of the country’s debt. And German Chancellor Angela Merkel said Wednesday that there wouldn’t be any new bailout talks before Sunday’s referendum in Greece.
Meanwhile, should Greek citizens vote “no” on Sunday — they would be voting no to tax increases and pension cuts — some observers are likely to see that as a precursor to an exit from the European Union.
And while Europeans might wonder if other Eurozone members might consider the same action, the impact in the U.S., at least, is likely to be less chaotic. Ben Garber, an economist at Moody’s Analytics, said given the overseas issues, Puerto Rico’s credit woes and lingering concerns about China’s economy, as well as the anticipation of the Federal Reserve tightening its monetary policy, the capital markets probably will face rough waters ahead. “Fortunately, the U.S. economy is performing solidly enough to withstand choppy market performance without leading to an extended credit market downturn,” the economist said.