US stocks crept into bear territory on reports that the eurozone ministers had reached an accord over Greece’s debt obligations.
News outlets cited a Greek government official as having said that Eurogroup ministers and Greece have agreed on a draft accord that might extend the country’s bailout.
The Wall Street Journal reported that the Dow Jones Industrial Average rose 0.3% or 47 points to 18,034 while the S&P 500 gained 0.1% or two points to 2,099. The Nasdaq Composite Index climbed 0.2% or 10 points to 4,934.
Jonathan Corpina, senior managing partner at brokerage firm Meridian Equity Partners said, “Any headline that’s showing progress in Greece is starting to move the market higher. We’ve had so many back-and-forth headlines on this Greek topic that I think we need more clarity or definitive information. Once we get more information the market will respond much more positively.”
In the recent sessions, US stocks have not been making any major moves as Greece and its creditors argue over a new financing deal. Germany rejected a Greek proposal on Thursday to extend its bailout program. Eurozone ministers are meeting on Friday for continued negotiations and most investors say that a deal will be reached eventually to prevent Greece from exiting the eurozone.
Market Watch quoted Channing Smith, portfolio manager at Capital Advisors as having said, “Markets are not pricing in an outcome in which Greece exists eurozone and we find that assertions that it will not affect markets as unfounded. It appears markets are certain a deal will be reached at 11th hour. So, investors bought every dip so far.”
However, Kate Warne, investment strategist at Edward Jones said, “I’m surprised the markets are paying as little attention to Greece as they are. It suggests investors have learned from past episodes that what we tend to see is a lot of posturing and then a last-minute deal.”
European stocks were little changed with the Germany DAX climbing 0.4% and the CAC 40 of France down 0.1%. The Japan Nikkei climbed 0.4% to a high of 15 years.
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