Wall St. Higher on Greece Hopes, Strong U.S. Data

Big 5

U.S. stocks edged higher Wednesday after Greece’s prime minister signaled he was prepared to accept most of creditors’ bailout terms and a raft of U.S. data pointed to a stronger economy.

Adding to the positive tone, financial stocks rallied after Swiss insurance giant ACE (ACE.N) snagged a deal to buy upmarket property insurer Chubb (CB.N) for $28.3 billion.

Greek Prime Minister Alexis Tsipras made his new offer a day after the country became the first advanced nation to default on an IMF loan.

“Investors are taking a collective sigh of relief that an armageddon type of scenario did not occur with respect to Greece,” said Adam Sarhan, chief executive of Sarhan Capital in New York.

“The markets are also rallying from deeply oversold level.”

U.S. shares pared some of their gains in late morning trading after Tsipras called for voters to reject bailout terms in a referendum on Sunday.

U.S. private employers added 237,000 jobs in June, the biggest gain since December, while construction spending rose in May to its highest level in just over 6-1/2 years.

The U.S. Federal Reserve has said it will raise rates only if it sees a sustained recovery in the economy.

“As long as the Fed raises rates because there is economic expansion and not because of inflation, it is a positive for equities because that means corporations can continue to grow earnings,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

At 11:32 a.m. EDT the Dow Jones industrial average .DJI was up 133.08 points, or 0.76 percent, at 17,752.59, the S&P 500 .SPX was up 14.78 points, or 0.72 percent, at 2,077.89 and the Nasdaq Composite .IXIC was up 34.37 points, or 0.69 percent, at 5,021.23.

Nine of the 10 major S&P 500 sectors rose.

Chubb’s shares jumped 30 percent to $124.35. Rival Travelers (TRV.N) rose 2.8 percent, providing the biggest boost to the Dow. ACE was up 4 percent.

Casino stocks jumped for a second straight day of gains following better-than-expected monthly gaming revenue in Macau.

Melco Crown (MPEL.O) rose 6.8 percent, Wynn Resorts (WYNN.O) 5.4 percent and Las Vegas Sands (LVS.N) 2.5 percent.

Constellation Brands (STZ.N) shares rise 1.3 percent to $117.44 after company reports better-than-expected Q1 profit and sales, helped by higher demand for its Corona and Modelo beers

General Mills (GIS.N) down 1.2 percent after company reports lower-than-expected quarterly sales, hurt by the strong dollar.

Advancing issues outnumbered decliners on the NYSE by 2,056 to 884, for a 2.33-to-1 ratio on the upside. On the Nasdaq, 1,712 issues rose and 921 fell for a 1.86-to-1 ratio favoring advancers.

The S&P 500 index showed 9 new 52-week highs and 20 new lows, while the Nasdaq recorded 66 new highs and 53 new lows.

Source: Reuters