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Stock indexes gain as Greek crisis nears deadline

Stock indexes gain as Greek crisis nears deadline

Stocks rose Thursday as a small increase in applications for unemployment benefits last week failed to dampen optimism over progress toward easing Greece's debt burden.
The Dow Jones Industrial Average rose 57 points, or 0.4 percent, at 12,894 as of 11:30 a.m. (1630 GMT).
The Standard & Poor's 500 index, a broader measure of the market, gained 10 to 1,363. All 10 industry sectors rose. The Nasdaq composite index rose 27 to 2,963.
The Labor Department said early Thursday that the number of people seeking unemployment benefits rose slightly more than expected last week. The four-week average remained near a four-year low, however, and applications are down 14 percent since October.
The government will issue its February jobs report on Friday, and economists are expecting more than 200,000 net jobs were added. If that prediction is correct, it would likely translate into a drop the unemployment rate for the sixth straight month, from 8.3 percent in January.
"A lot of the momentum that started in the fourth quarter is carrying through," said Brian Gendreau, market strategist for El Segundo, California-based Cetera Financial Group. In addition to the slowly improving job market, there are signs of life in housing and rising consumer spending. Gendreau said the gains were being held in check by rising oil prices and reports of slower growth in China and Brazil.
The market was headed for its second straight increase following a 203-point plunge in the Dow Tuesday, the first triple-digit loss for the index since the start of the year. The Dow gained back about a third of that loss Wednesday.
Also keeping large swings in check is the progress being made in Europe. Investors are keeping their eyes on a 3 p.m. (2000 GMT) deadline for private investors to decide whether to swap $140 billion in Greek government bonds for new ones worth much less.
If not enough private bondholders take part in the exchange, Greece could default in the next two weeks, but signs are indicating that the swap will succeed. Greek government officials told The Associated Press that participation was above 75 percent. Athens will release final results Friday morning.
Stocks rose around the world as optimism about the deal took hold.
Even if some of Greece's private investors reject the bond swap deal, Gendreau said the situation is clearly improving. "A year and a half ago, the idea that private bond holders would take a hit wasn't even on the table," he said. "There's progress being made and I think that's one of the reasons we're seeing volatility down."
While a major disruption is expected if Greece does default, Gendreau's sense is that the market response would not be as harsh as it might have been last year, when there were predictions the euro could collapse. He would expect a reaction that reflects more "fatigue and exasperation," he said. "But that's not the same as panic and crisis."
Among the stocks making big moves Tuesday:
_ Coach Inc. jumped 4.5 percent after the luxury accessories maker said it is sticking to its long-term sales goals.
_ McDonald's Corp. lost more than 3 percent after reporting slower growth in February.
_ American International Group Inc. fell 2.5 percent as the U.S. government moved to sell $6 billion worth of the bailed out insurer's common stock.


Updated : 2021-10-26 03:23 GMT+08:00