Market Recap: Euphoria Boosts Stocks as Greek Parliament Votes for Austerity
Markets closed up on Wall Street today: Dow +0.57%, S&P +0.68%, Nasdaq +0.95%, Oil +1.92%, Gold -0.02%.
On the commodities front, Oil (NYSE:USO) rose to $100.56 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) falling slightly to $1,724.90 an ounce while Silver (NYSE:SLV) rose 0.29% to settle at $33.70.
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Today’s markets were up because:
1) Greece. The Greek Parliament cleared the first of three hurdles it must overcome to qualify for a second bailout worth 130 billion euros when lawmakers approved a package of austerity reforms on Sunday. Greece needs the bailout funds to avoid a potential default on a 14.5 billion-euro bond redemption on March 20. Now the government need only identify another 325 million euros in spending cuts and give assurances that the program will be implemented even after elections are held later this year. If those conditions are met, euro-zone finance ministers are expected to endorse the program at a meeting on Wednesday.
2) Budget. The day held no major economic news, but President Obama did unveil a $3.8 trillion budget request that would impose a 30 percent minimum tax on millionaires while earmarking more than $800 billion for job creation and infrastructure investment. However, the Republican-led House of Representatives has already vowed to vote down the proposal, which the administration said would add more than $300 billion to the U.S. economy this year alone, as it would not only increase tax revenue, but also add an estimated $6 trillion to the national debt over the next decade.
3) Financials. Financial stocks posted early gains today in the wake of Greece’s debt deal. Shares of Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), and JPMorgan (NYSE:JPM) were all up more than 1 percent. Bank stocks tend to track developments in the sovereign debt crisis in Europe because of fears over their exposure to foreign debt. Positive developments abroad also helped Germany’s Deutsche Bank (NYSE:DB) and Royal Bank of Scotland (NYSE:RBS) post moderate gains.
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