FOX Business: The Power to Prosper
The Dow surpassed the 13000 level for the first time in nearly four years, but enthusiasm that a Greek default seems to have been averted for the moment quickly faded as traders wondered what will come next for the eurozone and eyed a big rally in many commodity markets.
The Dow Jones Industrial Average climbed 15.8 points, or 0.12%, to 12966, the S&P 500 rose 0.98 point, or 0.07%, to 1362 and the Nasdaq Composite dipped 3.2 points, or 0.11%, to 2949.
The 13000 threshold is psychologically important because it means the blue-chip average has completely rebounded from the financial crisis that sent stocks spiraling and threw the financial system and economy into a tailspin during 2008. Indeed, the last time the Dow traded at these levels, the unemployment rate was 5.4%, slightly more than half of the 10% hit in October 2009, and Lehman Brothers and Merrill Lynch stood as standalone entities.
The markets have had a strong year, with the Dow zooming 6%, and the broader S&P 500 jumping 8.2%.
Alcoa (AA) was the best performer out of the blue chips on a percent basis by a wide margin on the day, rallying more than 2%. Chevron (CVX), Caterpillar (CAT) and ExxonMobil (XOM) contributed 28.4 points to the Dow.
On the other end of the spectrum, Wal-Mart (WMT) fell 3.9% after its quarterly results disappointed traders. The world's biggest retailer tore 18.2 points from the Dow's overall performance. Merck (MRK), Intel (INTC) and Travelers (TRV) were among the other blue chip laggards.
Looking at the broader markets, energy and basic materials companies had the strongest day overall on the back of a strong rally in commodities. Health-care names, on the contrary, had the toughest time on the day.
Greek Deal Finalized, But Hurdles Remain
After months of marathon summits, last-minute parliamentary votes and intense protests, European Union leaders finally signed off on a $172 billion bailout package for Greece Monday night. A critical component of the deal was a debt exchange in which private creditors will voluntarily give up 53.5% in face value of their bond holdings.
Through that maneuver, deep austerity measures, and other reforms, European Union officials hope the country will be able to cut its public debt down to 121% of its economic output by 2020. Perhaps more importantly in the short-run, the deal should allow Greece to receive rescue aid before its next bond payment is due on March 20, meaning it will avoid a default that could have dealt a painful blow to financial markets.
Still, many analysts have remained only cautiously optimistic since the deal involves so many separate parts, and hinges on austerity measures that are highly unpopular in the country.
"This is a clear step forward for Greece and the euro area, but several implementation and political risks remain," according to analysts at Barclays Capital.
Echoing that view, Dan Greenhaus, chief global strategist at BTIG wrote in a note to clients that "it is only a matter of time until this matter is revisited with an outcome equally uncertain."
European shares were modestly lower on the day after rallying in the prior session. The euro fell 0.23% to $1.3212, while the dollar rose 0.08% against a basket of six world currencies tracked by the dollar index.
Commodities were broadly to the upside on the day. The benchmark crude oil contract traded in New York jumped $2.65, or 2.6%, to $106.25 a barrel. Oil is now trading at its highest level since May, having soared 7.1% so far this year.
Wholesale RBOB gasoline rose 1.8% to $3.07 a gallon.
In metals, gold was up $32.60, or 1.9%, to $1,759 a troy ounce. Meanwhile, traders sold U.S. Treasury bonds, pushing yields higher. The benchmark 10-year yields 2.052% from 2.007%.
Traders also had a slew of corporate earnings results to parse through, including three Dow components.
Wal-Mart (WMT) posted a fourth-quarter profit on continuing operations of $1.51 a share, topping estimates of $1.45. The world’s largest retailer, however, reported quarterly revenue of $122.3 billion, which fell short of the $124.2 billion analysts anticipated.
Home Depot posted a quarterly profit and revenue that topped Wall Street's estimates as a warm winter led consumers to take on projects they may have otherwise completed during spring, giving sales a boost.
Kraft Foods (KFT) reported a higher quarterly profit that matched analysts' estimates, but the maker of products like Oreo cookies posted sales that were shy of expectations.
Macy’s (M) revealed an adjusted fourth-quarter profit of $1.70 a share, beating expectations of $1.65. The department store chain’s revenue came in at $8.72 billion, matching estimates.
Elsewhere in Corporate News
Caterpillar (CAT) said its world dealer-reported retail sales jumped 27% in the three-month rolling period ended in January.
European blue chips fell 0.34%, the English FTSE 100 slipped 0.29% to 5928 and the German DAX dipped 0.58% to 6908.
In Asia, the Japanese Nikkei 225 fell 0.23% to 9463 and the Chinese Hang Seng edged higher by 0.25% to 21479.