Markets Rally as Greek Vote Quells Eurozone Jitters
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Bouncing back from Friday’s rare retreat, U.S. stocks coasted to a higher close on Monday as a crucial Greek vote on austerity measures soothed the markets’ eurozone headache and Apple catapulted the Nasdaq Composite to new 11-year highs.
The Dow Jones Industrial Average jumped 72.81 points, or 0.57%, to 12874.04, the Standard & Poor's 500 climbed 9.13 points, or 0.68%, to 1351.77 and the Nasdaq Composite advanced 27.51 points, or 0.95%, to 2931.39.
The latest buying binge on Wall Street adds to the markets' hot start to the year and leaves the blue chips within striking distance of the psychologically-important 14000 level.
Without any major economic or earnings reports on the agenda, traders largely focused on Greece, which signed off on new austerity measures over the weekend, raising hopes Athens may avoid a disorderly bankruptcy in the near term. The austerity package had a requirement for Greece to receive a $172 billion bailout from the European Union and International Monetary Fund.
Passage of the measures, which include deep spending cuts and a reduction of the minimum wage, triggered protests and then fiery confrontations with rioters overnight.
While the key vote was a necessary step to prevent a default and potentially calamitous bankruptcy, it doesn't appear to be the final chapter for Athens. Greece still faces a number of hurdles, including a meeting on Wednesday between eurozone finance ministers to vote on approving the bailout.
Still, the markets mostly cheered the developments, although the euro was off 0.05% to $1.3188, giving up its modest gains. European markets climbed higher and funding costs in Italy retreated after a bond auction. Shares of European banks with exposure to Greece like UBS (NYSE:UBS) advanced.
“European fears got eased somewhat with the agreement being passed over the weekend,” said Michael James, managing director of equity trading at Wedbush Securities. “We basically made back what we lost on Friday.”
The upbeat day on Wall Street comes after the Dow dropped 89 points on Friday in a rare selloff that was triggered by fears about Greece. The retreat knocked the S&P 500 0.17% lower on the week, snapping a five-week win streak.
Tech stocks helped lead the charge higher, continuing their very strong start to 2012 and leaving the Nasdaq Composite at its highest level since December 2000. Shares of Apple (NASDAQ:AAPL), still on fire after a blockbuster earnings report last month, soared another 1.5% and hit a fresh all-time high above $500. Similarly, online retailer Amazon.com (NASDAQ:AMZN) raced 3% higher.
In the commodities complex, the CME Group (NYSE:CME) briefly halted electronic trading of crude oil due to a technical glitch. Enjoying its best one-day gain since January 3, crude settled at $100.92, up $2.24, or 2.27%, on the day. Gold fell 30 cents a troy ounce, or 0.02%, to $1,723.00.
Avon Products (NYSE:AVP) declined to comment on a report in The Wall Street Journal indicating a foreign-bribery case against the beauty company intensified as prosecutors presented evidence to a grand jury. The U.S. is focusing on a 2005 internal audit that concluded Avon workers in China bribed officials, the paper reported.
General Electric (NYSE:GE) and JPMorgan Chase (NYSE:JPM) revealed plans to hire thousands of U.S. veterans. GE said it will hire 5,000 vets over the next five years, while JPMorgan told FOX Business it plans to open 200 new branches in Florida and hire more veterans after hiring 3,000 ex-military last year.
The British FTSE 100 jumped 0.91% to 5905.70, Germany's DAX advanced 0.68% to 6738.47 and the French CAC 40 gained 0.34% to 3384.55.
In Asia, Japan's Nikkei 225 rose 0.58% to 8999.18 and Hong Kong's Hang Seng closed up 0.50% to 20887.40.