Wall Street Jumps in Broad Rally on Greece Hopes

Published: 11th July 2015 12:21 AM  |   Last Updated: 11th July 2015 12:21 AM   |  A+A-


A trader works shortly after the opening bell on the floor of the New York Stock Exchange, July 9, 2015. | Reuters

NEW YORK: U.S. stocks rose broadly on Friday, with major indexes up more than 1 percent on hopes Greece would be able to secure fresh funding at an upcoming weekend meeting, which would allow it to avert bankruptcy and remain in the euro zone.

Indexes slightly trimmed their gains in afternoon trading after Federal Reserve Chair Janet Yellen said she expected the Fed to raise interest rates at some point this year, while expressing concern that the U.S. labour market remained weak.

Investors have long expected a hike this year, though opinions have been split on whether it would come in September or December. Yellen gave no direct hint about whether the central bank would raise rates more than once over the course of its four remaining meetings in 2015.

The day's gains were widespread, with all ten of the S&P 500's primary sectors higher on the day.

Euro zone finance ministers will meet on Saturday to decide on a third bailout for Greece, which made substantial concessions in its latest proposal to lenders, including tax hikes, in hopes of receiving $59 billion to help it cover debts until 2018.

"Investors are betting that a Greek deal will be stuck by this Sunday, and that reduction of risk is boosting stocks today. The removal of the risk of an exogenous shock means better market psychology," said Jim McDonald, who helps oversee $960 billion in assets as chief investment strategist at Northern Trust Asset Management in Chicago.

Despite the gains on the day, major indexes remained on track for a tepid week. The Dow is up 0.1 percent for the week while the S&P is down less than 0.1 percent and the Nasdaq is down 0.3 percent in its third straight weekly decline. Equities were pressured earlier this week by a slowdown in China, weak commodity prices and uncertainty over the Greek debt crisis.

Wall Street was also supported on Friday by a continued recovery in China's equity market, which was helped by a barrage of government support measures. Chinese Premier Li Keqiang said the country would make more targeted changes to its policies to support the economy and promised to increase the transparency of China's capital and money markets.

The Bank of New York Mellon China's index of Chinese shares traded in the United States <.BKCN> rose 2 percent.

The Dow Jones industrial average <.DJI> rose 208.59 points, or 1.19 percent, to 17,757.21, the S&P 500 <.SPX> gained 24.88 points, or 1.21 percent, to 2,076.19 and the Nasdaq Composite <.IXIC> added 71.62 points, or 1.45 percent, to 4,994.01.

The U.S. quarterly earnings season kicked off earlier this week, with Pepsi <PEP.N> and Alcoa <AA.N> reporting better-than- expected sales. However, corporate earnings are estimated to have fallen 3.1 percent in the second quarter, according to Thomson Reuters data.

Cablevision <CVC.N> jumped 7.1 percent at $26.61 on a Wall Street Journal report that French billionaire Patrick Drahi was looking at cable targets for acquisitions.

Zillow <Z.O> fell 6.3 percent to $79.90 a day after it said its chief financial officer was leaving the company to pursue other business interests.

Advancing issues outnumbered declining ones on the NYSE by 2,381 to 646, for a 3.69-to-1 ratio on the upside; on the Nasdaq, 2,105 issues rose and 631 fell for a 3.34-to-1 ratio favouring advancers.

The benchmark S&P 500 index was posting 15 new 52-week highs and 13 new lows; the Nasdaq Composite was recording 70 new highs and 50 new lows.

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