August 14, 2022

Markets Move Ahead as Greece Worries Subside

Around midday on Wall Street, the Dow Jones industrial average put on 101.23 points, or 0.8 percent, at 12,181.61. The Standard Poor’s 500-stock index advanced 15.87 points, or 1.2 percent, at 1,294.23. The Nasdaq composite index jumped 48.14 points, or 1.8 percent, at 2,677.80.

Euro zone finance ministers said the Greek government had until July 3 to approve new steps to get the next installment of 110 billion euros in aid from the European Union and International Monetary Fund.

The market expects a vote of confidence in Prime Minister George Papandreou’s new cabinet to pass on Tuesday — the first of three hurdles the Greek government must clear to avert the euro zone’s first sovereign debt default. The vote was due around 5 p.m. E.D.T.

“The impact from the Greece vote will surely be positive on the market, but I believe it will be relatively short. Yes, we will see a follow-through for a couple days, but the fundamental problem is that the global economy is slowing. Everyone is pointing fingers at Greece for every tick up and down, but that’s day-to-day trading. I don’t see this resolving the fundamental issue,” said Jack De Gan, chief investment officer at Harbor Advisory Corp. in Portsmouth, N.H.

In Europe, the CAC 40 stock index in Paris rose 2 percent for the day, adding 77.41 points at 3,877.07. The FTSE 100-stock index in London rose 81.92 points, or 1.4 percent, to 5,775.31, while the DAX in Frankfurt gained 135.30 points, or 1.9 percent, to 7,285.51.

In the United States, the Federal Reserve Open Market Committee was to begin a two-day meeting later Tuesday. Economists expect the Fed to cut its growth forecast for 2011, but the central bank and its chairman, Ben S. Bernanke, will probably continue to argue that the slowdown is temporary and that the economy will pick in the second half of the year.

Adding to the positive sentiment, sales of existing homes fell to a six-month low in May, but the decline was less than expected.

On Monday, stocks erased early losses as the Standard Poor’s 500-stock index dipped toward 1,259.78, its 200-day moving average, which is often viewed as a pivotal point in determining market direction.

Article source: http://www.nytimes.com/2011/06/22/business/22markets.html?partner=rss&emc=rss

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