BackBets on euro zone progress boost Wall Street
Bets on euro zone progress boost Wall Street
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New York: US stocks gained on Tuesday as investors bought shares beaten down in recent weeks and bet European leaders would take action soon to ease the Greek debt crisis.
Worries the euro zone crisis could tip the global economy into another recession have pummeled stocks, though the selling has reached a level that some argue a Greek default is priced in to the market.
Investors appeared to be pinning hopes on progress being made during a conference call planned between French President Nicolas Sarkozy, German chancellor Angela Merkel and Greek Prime Minister George Papandreou on Wednesday.
Buyers pushed large-cap tech shares higher. They are viewed by some as less risky stock bets and an area likely to benefit in an improving economic climate.
Some analysts said the market had factored in more negative scenarios so that any improvement in Europe would be a reason to buy.
“There’s still a chance there’s some big rescue package coming, but I think that investors have mulled over the worst-case, short-term scenarios," said Bryant Evans, investment adviser and portfolio manager at Cozad Asset Management, in Champaign, Illinois.
“I think investors are perhaps becoming a little more comfortable with the idea that Greece is probably going to have to default."
Reuters calculations based on Markit credit default swap prices put the probability of a Greek default at 90%. Greek two-year bond yields hit a record near 94%.
The Dow Jones industrial average was up 44.73 points, or 0.40%, at 11,105.85. The Standard & Poor’s 500 Index was up 10.60 points, or 0.91%, at 1,172.87. The Nasdaq Composite Index was up 37.06 points, or 1.49%, at 2,532.15.
Overseas stocks also rose, with the FTSEurofirst 300 index of top European shares ending up 1.1%.
Oracle Corp, Intel Corp and Apple Inc provided the biggest boosts to the Nasdaq index, with Oracle up 3.6% at $27.72.
The industrial sector led gainers on the S&P 500. The S&P industrial index was up 1.9%.
Among declining stocks, Best Buy said quarterly sales were flat, missing estimates on weak demand for televisions, but the big consumer electronics chain stood by its fiscal-year revenue outlook. Its shares slid 6.5% to $23.35.
Volume was 7.8 billion shares on the NYSE, Amex and Nasdaq, slightly above last year’s average of 7.6 billion.
Advancers beat decliners by nearly 4 to 1 on the NYSE and by about 10 to 3 on the Nasdaq.
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