Wednesday, Jun 20, 2018
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Stock markets higher as optimism builds about Greek debt exchange

NEW YORK — Stocks held on to early gains Thursday as signs indicated that a deal to restructure Greece's debt will succeed, overshadowing a small increase in applications for unemployment benefits last week.

The Dow Jones industrial average was up 70 points at 12,907 in midday trading.

The Standard & Poor's 500 index, a broader measure of the market, gained 10 to 1,363. All 10 industry sectors rose. The Nasdaq composite index rose 27 to 2,963.

The market was headed for its second straight increase following a 203-point plunge in the Dow Tuesday, the first triple-digit loss for the index since the start of the year. Together with Wednesday's 78-point gain, the Dow has now made up more than half of that loss.

Friday marks the three-year anniversary of the stock market's bottom during the financial crisis. The S&P 500 and the Dow have both roughly doubled since then.

Investors were keeping their eyes on a 3 p.m. EST deadline for private investors to decide whether to swap $140 billion in Greek government bonds for new ones worth much less.

If not enough private bondholders take part in the exchange, Greece could default in the next two weeks. Greek government officials told The Associated Press that participation was above 75 percent. Athens will release final results Friday morning.

The Labor Department said early Thursday that the number of people seeking unemployment benefits rose slightly more than expected last week. The four-week average remained near a four-year low, however, and applications are down 14 percent since October.

The government will issue its February jobs report on Friday, and economists are expecting more than 200,000 net jobs were added. If that prediction is correct, it would likely translate into a drop the unemployment rate for the sixth straight month, from 8.3 percent in January.

"A lot of the momentum that started in the fourth quarter is carrying through," said Brian Gendreau, market strategist for El Segundo, Calif.-based Cetera Financial Group. In addition to the slowly improving job market, there are signs of life in housing and rising consumer spending.

Stocks rose around the world as optimism about the Greek debt deal took hold. In Europe, the FTSE 100 index of leading British stocks rose 1 percent. Germany's DAX rose 2.4 percent and the CAC-40 in France rose 2.4 percent. The euro also rose against the dollar.

Even if some of Greece's private investors reject the bond swap deal, Gendreau said the situation is clearly improving. "A year and a half ago, the idea that private bond holders would take a hit wasn't even on the table," he said.

While a major disruption is expected if Greece does default, his sense is that the market response would not be as harsh as it might have been last year, when there were predictions the euro could collapse. He would expect a reaction that reflects more "fatigue and exasperation. But that's not the same as panic and crisis."

Among the stocks making big moves Tuesday:

— Coach Inc. jumped 6.5 percent after the luxury accessories maker said it is sticking to its long-term sales goals.

— McDonald's Corp. lost more than 3 percent after reporting slower growth in February.

— Simon Property Group Inc. fell about 2 percent after the largest mall operator in the U.S. announced two real estate deals that total $3.5 billion, including a $2 billion investment in Europe.

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