Portugal is upgraded out of junk status and its markets jump

Economic IndicatorsAssociated Press

Portugal's stock market is surging and its government borrowing rates are falling after the country recovered its investment-grade rating from Standard & Poor's.

The Lisbon stock exchange rose more than 1 percent Monday and the 10-year bond yield dropped 0.29 percentage points — an unusually large one-day increase — to 2.49 percent, the lowest rate since late 2015.

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S&P said late Friday that Portugal has made "solid progress" in restoring its financial health since needing a 78 billion-euro ($93 billion) bailout in 2011 amid the eurozone crisis. It raised its rating from BB+, or junk status, to BBB-.

Fitch and Moody's, the other two main ratings agencies, still rate Portugal's debt at junk.

After a period of austerity and recession, Portugal expects the economy to grow 2.5 percent this year.