US stocks rally after Greek vote

NEW YORK: US stocks rallied on Wednesday after the Greek parliament approved an unpopular austerity plan, warding off the risk of a sovereign default that could destabilize Europe's financial system.

The Dow Jones Industrial Average gained 72.73 points (0.60 percent) to close at 12,261.42.

The broader S&P 500 rose 10.74 points (0.83 percent) to 1,307.41, while the tech-heavy Nasdaq Composite climbed 11.18 points (0.41 percent) to 2,740.49.

The rally came after lawmakers in Athens defied angry protests and approved the 28.4-billion-euro ($40 billion) austerity plan, which had been demanded by Greece's eurozone partners and the International Monetary Fund.

"It's all about Greece," said Peter Cardillo, chief market economist at Avalon Partners.

"The Greece situation relieves the market in the immediate short term, now the markets (will) start to focus on the economic data and earnings."

Financial stocks, which have been battered by uncertainty over potential fallout from Greece, were among the strongest performers, with JPMorgan Chase rising 2.3 percent and American Express jumping 2.6 percent.

Bank of America surged 3.0 percent after it announced an $8.5 billion settlement with investors who lost money on mortgage-backed securities during the 2008 collapse of the US housing market.

The settlement, through costly, was hailed by Wall Street analysts as a welcome resolution to questions that had dogged Bank of America since the financial crisis.

In a hopeful sign for the US housing market, a monthly report from the National Association of Realtors showed that pending home sales rose 8.2 percent from April to May.

Bond prices fell. The yield on the 10-year US Treasury note rose to 3.11 percent from 3.05 percent on Tuesday, while that on the 30-year bond climbed to 4.37 percent from 4.33 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011