Top 3 Reasons Markets Were Up on Hopes for Greece Resolution
Markets closed up on Wall Street today: Dow +1.22%, S&P +1.36%, Nasdaq +0.72%, Oil +0.86%, Gold -0.44%.
Today’s markets were up because:
1) Debt deal? Early this afternoon the New York Times reported that President Obama and House Speaker Boehner were nearing budget deal, giving the already positive markets an added boost. Despite the White House denying the veracity of the article, the New York Times is sticking to their source and the story, and so too are investors from the look of things. For the most part, the markets have held on to their afternoon gains.
2) European summit. Early reports coming out of the the summit in Brussels, where European leaders were meeting to discuss Greece’s second bailout, had it looking as though a plan of action would be agreed upon today. France (NYSE:EWQ) and Germany (NYSE:EWG) were supporting a plan that would allow Greece to go into selective default and allow for a bond buyback that would involve private investors in the relief effort, and for the first time the ECB, previously adamantly opposed to any plan involving Greek default, was on board with the plan. Not long after initial reports, the summit released a draft statement saying they’d agreed upon a program that would “fully cover the financing gap.” Opa!
3) Unemployment claims. It’s possible this morning’s good news had investors a bit too optimistic. While a plan to combat sovereign debt issues in Europe shouldn’t be taken for granted, the Labor Department reported today that jobless claims increased by 10,000 last week. On top of that, the dollar fell against the yen, the pound, and the euro, while U.S. bond yields and oil futures both rose. But it seems the possibility of two solutions for two of the biggest issues facing the global economy was just too great to be brought down by factors that are continually in flux.