Stocks Jump as Greece Closes in on Debt Exchange


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Wall Street posted solid gains for the second day in a row, with the broad S&P 500 jumping nearly 1%, amid optimism Greece may be nearing a conclusion to the months long debt-exchange saga.

Today's Markets

The Dow Jones Industrial Average climbed 70.6 points, or 0.55%, to 12908, the S&P 500 gained 13.3 points, or 0.98%, to 1366 and the Nasdaq Composite rose 34.7 points, or 1.2%, to 2970.

The rally on the day was quite broad, with several sectors posting big gains. Some of the best performers could be found within the materials, industrial, healthcare, technology and financial sectors. Meanwhile, safety plays like utilities and consumer staples rose more modestly. Volatility plummeted more than 5% and traders kept moving out of safe-haven assets. Indeed, the yield on the 10-year note rose 0.043-percentage point to 2.014%.

Out of the blue chips, Alcoa (NYSE:AA), the aluminum giant, Caterpillar (NYSE:CAT), the world's biggest maker of heavy machinery and chemical-maker DuPont (NYSE:DD) posted the biggest gains. On the other end of the spectrum, McDonald's (NYSE:MCD) shares struggled, shedding 3% and paring more than 20 points off of the Dow's overall performance.

All Eyes on Greece

The markets have been unusually volatile this week for what has been a particularly tame year thus far. The Dow shed more than 200 points on Tuesday, just to rise for two days. Market participants have been paying very close attention to the ongoing drama in Greece.

At least 75% of private creditors holding Greek sovereign debt have signed on to a bond exchange that will cut the value of their holdings by more than half, according to multiple media reports. Corralling sufficient interest is critical for two reasons: it is a key condition on a rescue by European lenders and it will help cut the country's public debt level down. There have been fears for months that Greece would default, most recently, on its payment that comes due on March 20. Still, the situation remains very fluid, and is subject to change at the last minute, analysts say.

Also on the European front, the European Central Bank and Bank of England both held their key interest rates unchanged as economists expected. The BoE also said it is holding the size of its asset-purchase program steady. Both central banks have to balance the need to keep their economies afloat amid strong headwinds with the risk of inflation.

The euro jumped 0.82% to $1.3257, while the U.S. dollar slumped 0.48% against a basket of six world currencies tracked by the dollar index. The Euro Stoxx 50 jumped 2.2%.

The number of individuals filing for first-time jobless benefits unexpectedly rose by 8,000 to 362,000 last week. Economists expected claims to hold steady an initially-projected 351,000. A report on Wednesday showed the the private sector added slightly more jobs than expected last month ahead of the closely-watched monthly employment report from the Labor Department that is on tap for Friday.

Commodities market were modestly higher, helped by a weak dollar and rallying equities. The benchmark crude oil contract traded in New York climbed 42 cents, or 0.4%, to $106.58 a barrel. Wholesale New York Harbor RBOB gasoline rose 0.81% to $3.314 a gallon.

In metals, gold gained $14.80, or 0.88%, to $1,699 a troy ounce.

Corporate News

McDonald's (NYSE:MCD) said its global comparable sales jumped 7.5% in February, lighter than the 7.7% analysts were expecting.

Foreign Markets

European blue chips jumped 2.2%, the English FTSE 100 gained 1.2% to 5860 and the German DAX soared 2.5% to 6835.

In Asia, the Japanese Nikkei 225 rallied 2% to 9675 and the Chinese Hang Seng rose 1.3% to 20723.