Stocks on Wall Street rose in early trading after encouraging signs about Europe’s debt crisis overshadowed a dismal report about spending by American consumers.
Greece’s parliament was debating an austerity package that must pass for that nation to receive a second bailout and avoid defaulting on its debt. European markets rose Monday after French banks agreed to let Greece repay some of its debt more slowly.
Earlier Monday, the Commerce Department said that American consumer spending was unchanged in May, the weakest pace in 20 months, another sign that the economic recovery slowed this spring.
The Dow Jones industrial average was up 78 points, or 0.7, percent, at 12,012. The Standard Poor’s 500-stock index was up 7 points, or 0.6 percent, at 1,276. The Nasdaq composite index rose 19, or 0.8 percent, at 2,672.
Investors are hopeful that Greece will get another financial lifeline to see it through the next couple of years even if some lawmakers from the governing Socialist Party fail to back the measures in a vote this week. The expectation was that votes from other parties will see the government home.
That has eased concerns over what impact a Greek default would have on Europe’s financial system. Many analysts say a default could trigger mass panic in the markets, akin to what happened in the aftermath of the 2008 collapse of investment bank Lehman Brothers.
Ahead of the vote, the French government on Monday said banks had agreed to roll over a significant amount of their holdings in Greek debt.
France’s president, Nicolas Sarkozy, said the plan being worked out between French government officials and bankers would involve reinvesting debt held by French banks in new securities over 30 years. The hope was that would ease the pressure on Greece to constantly find money to pay off investors.
French bondholders hold about 15 billion euros in Greek government debt.
European leaders are trying to get the private sector to take part in Continental efforts to help Greece avoid default. Finance ministers from the 17 euro zone countries are scheduled to meet Sunday and confirm Greece’s next batch of bailout funds — provided the Greek Parliament has backed the austerity measures.
Stocks in Europe were mixed to start the week, while the euro edged 0.4 percent higher to $1.4244.
The FTSE 100 index of leading British shares was up 0.2 percent at 5,709, while Germany’s DAX was 0.2 percent lower, to 7,108. The CAC 40 in France was 0.1 percent higher at 3,789.
Earlier in Asia, Japan’s Nikkei 225 fell 1 percent to close at 9,578.31, while South Korea’s Kospi lost 1 percent to 2,070.29.
Hong Kong’s Hang Seng fell 0.6 percent to 22,041.77, but shares in mainland rose. China’s Shanghai Composite Index gained 0.4 percent to 2,758.23 while the smaller Shenzhen Composite Index added 1.1 percent to 1,148.63.
In the oil markets, prices continued to fall following last week’s surprise decision by oil-consuming countries to release 60 million barrels of crude over 30 days. Benchmark oil for August delivery was down $1.12 to $90.04 a barrel.
Article source: http://feeds.nytimes.com/click.phdo?i=5c117476dd1d757236360bf733464ce5
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