Merkel com­ment stokes broad rally

Los Angeles Times - - REAL ESTATE -

Signs of progress in ne­go­ti­a­tions over Greece’s debts helped launch a stock mar­ket rally Wed­nes­day, snap­ping a week­long slump.

The rally was broad: All 30 stocks in the Dow Jones industrial av­er­age and all 10 in­dus­try groups in the S&P 500 in­dex made gains.

“Every­body’s screen is full of green,” said Matt Kau­fler, a fund manager at Fed­er­ated In­vestors.

Ma­jor in­dexes started higher at the open­ing of trad­ing, putting the mar­ket on track for solid gains. Around mid­day, Bloomberg re­ported that Ger­man Chan­cel­lor An­gela Merkel may be will­ing to re­lease more money from Greece’s bailout fund if the Greek gov­ern­ment com­mits to at least one move to tighten its bud­get. With­out a deal by the end of the month, Greece faces the prospect of go­ing bank­rupt and drop­ping the euro.

The stock mar­ket surged af­ter the news broke and held most of its gains un­til the closing bell.

The Stan­dard & Poor’s 500 in­dex climbed 25.05 points, or 1.2%, to close at 2,105.20. It was the best day for the broad-mar­ket bench­mark in a month.

The Dow Jones industrial av­er­age ral­lied 236.36 points, or 1.3%, to 18,000.40, while the Nas­daq com­pos­ite gained 62.82 points, or 1.3%, to 5,076.69.

U.S. gov­ern­ment bond prices con­tin­ued to slide. The drop nudged the yield on the 10-year Trea­sury note to an­other high for the year, 2.49%. In late trad­ing the yield was 2.48%. Long-term in­ter­est rates have surged in re­cent months as the econ­omy shows signs of shak­ing off its win­ter slump.

“The mar­ket is start­ing to price in an im­prov­ing econ­omy,” said Brad McMillan, the chief in­vest­ment of­fi­cer at Com­mon­wealth Fi­nan­cial. “And we’re see­ing a lot of great eco­nomic num­bers.”

McMillan pointed to last Fri­day’s re­port from the La­bor Depart­ment that showed em­ploy­ers added 280,000 work­ers to their pay­rolls last month. Wages, which had barely moved in pre­vi­ous months, also edged up. “There was just a lot to like in that re­port,” he said.

Ma­jor mar­kets in Europe fin­ished with solid gains Wed­nes­day. Ger­many’s DAX jumped 2.4%, while France’s CAC-40 closed with a gain of 1.7%. The FTSE 100 in­dex of lead­ing Bri­tish shares added 1.1%.

The yen jumped against the dollar af­ter the head of the Bank of Ja­pan said the coun­try’s cur­rency was un­likely to con­tinue its slump. The dollar fell 1.4%, to 122.64 yen .

Ja­pan’s bench­mark Nikkei 225 slipped 0.2%, and South Korea’s Kospi shed 0.6%. Hong Kong’s Hang Seng lost 1.1%, and Australia’s S&P/ASX 200 closed 0.1% lower.

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