US stocks rose yesterday, recovering most of the week’s losses, after Greece moved closer to a bond swap with private creditors to avoid a messy default.
Earlier in the week, the S&P 500 posted its first big loss for the year on fears of a disorderly default in Greece. Now it is down just 0.3 per cent for the week, and yesterday’s advance was led by shares in the materials and industrial sectors.
Greece was able to convince enough private bondholders to accept a restructuring last night, moving it closer to unlocking aid needed to avoid a disruptive default.
“Today’s move is based on the assumption that the Greek deal is resolved. But this is an important week, as we still have the jobs report due tomorrow,” said Jack DeGan, chief investment officer at Harbor Advisory Corp in New Hampshire.
Expectation for Friday’s US jobs data are for a net gain of 210,000 jobs in February. An unexpected rise in new US weekly jobless claims yesterday was not enough to change perceptions that the labour market was strengthening – a major catalyst in the current rally.
“As long as it comes in line with forecast, or even a little bit lower, it will strengthen the current upward trend,” DeGan said.
Apple shares jumped 2.1 per cent to $541.99. Analysts said Apple will continue to retain the lion’s share of the tablet market as its new 4G-enabled iPad readies for competition from Windows 8-based products, and a cheaper iPad 2 takes on Amazon’s popular Kindle Fire.
An S&P index of basic materials stocks shot up 1.6 per cent, leading the S&P 500’s advance. The Reuters/Jefferies CRB commodities index rose 0.6 per cent, shifting into positive mode after four straight down sessions.
The Dow Jones industrial average gained 70.61 points, or 0.55 per cent, to 12,907.94 at the close. The Standard & Poor’s 500 Index rose 13.28 points, or 0.98 per cent, to 1,365.91. The Nasdaq Composite Index advanced 34.73 points, or 1.18 per cent, to close at 2,970.42.
Coach, the luxury leather goods retailer, hit a record high of $78.22 after the overall positive tone of a presentation at a Bank of America conference. The stock later eased, but it still ended up 4.6 per cent at $76.79.
American International Group fell 3.9 per cent to $28.31 after the US Treasury priced its $6bn offering of AIG stock at $29 a share.