US stocks surge over 1pc on Greek hopes

NEW YORK: US stock markets rallied on Tuesday, with all three major indices leaping more than one percent amid optimism that Europe would reach a deal to avoid a destabilizing default by Greece.

The Dow Jones Industrial Average rose 145.13 points (1.21 percent) to close at 12,188.69.

The broader S&P 500 jumped 16.57 points (1.29 percent) to 1,296.67, while the tech-heavy Nasdaq Composite climbed 41.03 points (1.53 percent) to 2,729.31.

Investors welcomed reports that progress was being made in talks to prevent a Greek default, in part by rolling over a large portion of Greece's debt into 30-year bonds.

Market participants were hopeful that Greece's government would succeed in pushing through unpopular austerity measures, despite a general strike called by unions that led to street clashes in Athens.

The rally was driven by "optimism that Greece will come through with passing their austerity plan," said Scott Marcouiller, chief technical market strategist with Wells Fargo Advisors.

Energy stocks jumped along with a rebound in oil prices, with ExxonMobil rising 2.1 percent and Chevron gaining 1.4 percent after the world's two major oil benchmarks -- West Texas Intermediate in New York and Brent North Sea crude in London -- both gained more than two dollars a barrel.

Bond prices dropped as investors left the safety of US government debt for riskier assets such as stocks.

The yield on the 10-year US Treasury note rose to 3.05 percent from 2.93 percent on Monday, while that on the 30-year bond climbed to 4.33 percent from 4.28 percent.

Bond prices and yields move in opposite directions.

axo

Copyright AFP (Agence France-Presse), 2011