April 20, 2024

Stock Surge in Early Trade on Optimism Over Greece

Europe stepped up efforts to draft a second bailout package for Greece, with private sector participation still an option to help relieve the country of its huge debt burden.

Rising expectations of a second aid package for Greece sent crude oil 2.3 percent to $102.88 a barrel in the United States. Exxon Mobil added 1 percent to $83.49, and Chevron gained 1.7 percent to $104.95.

The firming of the euro supported metals prices, with copper rising to a four-week high. The mining company Freeport-McMoRan Copper Gold rose as much as 1.7 percent to $52.63.

“The news out of Europe is propelling the market higher in pretrading, following the rest of the global markets. News regarding a Greece bailout is basically fueling the optimism,” said Peter Cardillo, chief market economist at Avalon Partners in New York.

“It is causing the dollar to go back down, strengthening the euro, so that is inviting risk back into the marketplace.”

In midmorning trading, the Dow Jones industrial average rose 81.36, or 0.7 percent, to 12,522.94. The Standard Poor’s 500-stock index was up 7.2 points, or 0.5 percent, at 1,338.30, and the Nasdaq composite index was up 13.97 points, or 0.5 percent, at 2,810.83.

On the economic front, the S.P. Case-Shiller Home Price Index for 20 large cities, not seasonably adjusted, fell 0.8 percent in March from the month before, as expected. It was the eighth decline in a row and left prices down 33.1 percent from the July 2006 peak.

The Institute of Supply Management Chicago said its index of Midwest business activity fell in May to 56.6 from 67.6 in April. Economists had forecast a reading of 62.6.

In another report, consumer confidence slid in May as consumers turned more pessimistic on the outlook for the labor market and inflation worries rose, according to the Conference Board. The report said that its index of consumer attitudes fell to 60.8 from a revised 66.0 in April. The reading was below economists’ forecasts for 66.5.

The chemicals maker Ashland said it would buy the privately held International Specialty Products for about $3.2 billion in cash to expand in high-growth markets such as personal care, pharmaceutical and energy. Ashland’s stock rose 10 percent.

European shares rose 1 percent on optimism over a possible Greece deal, with banks among the biggest gainers.

Asian stocks were mostly higher Tuesday, with the Nikkei lifted 2 percent by an upbeat outlook from Japan’s manufacturers and a weaker yen, while regional solar stocks gained after Germany said it would phase out nuclear power by 2022.

Article source: http://www.nytimes.com/2011/06/01/business/01markets.html?partner=rss&emc=rss

Speak Your Mind