Optimism on Greek debt deal lifts stocks

The U.S. stock market posted substantial gains Thursday as Greece closed in on a deal to restructure its debt and avoid a default. That overshadowed a small increase in unemployment claims last week.

The Dow Jones industrial average closed up 70.61 points, or 0.6%, at 12,907.94. Two days of solid gains have erased about three-quarters of the losses from Tuesday, when the Dow fell 203 points.

The close left the Dow up 97% since March 9, 2009, its low point during the Great Recession. Last week, the Dow closed above 13,000 for the first time since May 2008. The Standard & Poor’s 500 index has more than doubled in three years.

On Thursday, the S&P 500 added 13.28 points and the Nasdaq composite index rose 34.73.

The Greek crisis is “starting to wind down, we hope,” said Paul Powers of Raymond James. “It doesn’t seem nearly as dire as it was a couple of weeks ago.”

The rally came despite a Labor Department report 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.

The government reports Friday on how many jobs the U.S. economy added in February and the unemployment rate. Economists expect 200,000 jobs were added. If the unemployment rate falls from 8.3%, it would be the sixth straight decline.