Adebowale, Adebolajo Found Guilty of U.K. Soldier Murder
U.S. Stocks Advance on Plan for Additional Greek Aid, Earnings
U.S. stocks rallied, extending a weekly gain for the Standard & Poor’s 500 Index, as European officials announced a plan that will give additional aid to Greece and Morgan Stanley (MS)’s results beat estimates.
Morgan Stanley jumped 11 percent after the world’s largest brokerage posted a smaller-than-estimated loss as trading revenue rose from the first quarter. Motorola Mobility Holdings Inc. soared 12 percent after Carl Icahn urged the handset maker to explore alternatives for its patents. Medco Health Solutions Inc. (MHS) advanced 14 percent after Express Scripts Inc. (ESRX) agreed to buy the pharmacy-benefits manager for $29.1 billion.
The S&P 500 added 1.4 percent to 1,343.80 at 4 p.m. in New York, extending its gain this week to 2.1 percent. The Dow Jones Industrial Average climbed 152.50 points, or 1.2 percent, to 12,724.41.
“It’s a sigh of relief,” said Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, which manages $3.3 billion. “Progress on Europe’s debt situation is allowing the market to remain at these levels. All of the other satellite countries are looking to see how the EU settles the debt situation in Greece because it has ramifications for the European banks. It’s the framework for a package and the markets have reacted positively.”
Greece will receive additional aid of 109 billion euros ($157 billion), according to the European Union. Italian Prime Minister Silvio Berlusconi said the total value of a second Greek bailout is 160 billion euros. French President Nicolas Sarkozy said that measures agreed by euro-region leaders today to aid Greece will not be replicated to help other countries.
The euro and equities strengthened as European Union said Greece will receive aid worth 160 billion euros ($230 billion) and leaders agreed to increase the power of their regional rescue fund to allow it to act on a precautionary basis, finance the recapitalization of banks and buy bonds in the secondary market.
The S&P 500 extended gains as the New York Times reported that President Barack Obama and House Speaker John Boehner were close to a “major budget deal,” boosting optimism the world’s biggest economy will avoid defaulting on its debt. Spokesmen for Obama and Boehner denied the report.
The S&P 500 had its biggest rally since March on July 19 as Obama endorsed a bipartisan deficit-reduction plan from the so- called Gang of Six senators. The index declined 2.8 percent from a three-year high in April through yesterday amid speculation the sovereign debt crisis in Europe is spreading and concern U.S. lawmakers will fail to reach a deal on raising the debt limit before the Aug. 2 deadline, pushing the government closer to default.
S&P reiterated today that there is a 50 percent chance it will lower the U.S. credit rating within three months as lawmakers struggle to reach agreement.
Earnings results have boosted U.S. stocks this week. Of the 100 S&P 500 companies that have reported earnings since July 11, 86 percent have exceeded analyst estimates, according to Bloomberg data.
Stock futures maintained gains after a report said more Americans than forecast filed claims for unemployment benefits last week. Applications for jobless benefits increased 10,000 last week to 418,000, Labor Department figures showed. Economists forecast 410,000 claims, according to the median estimate in a Bloomberg News survey.
The Conference Board’s index of U.S. leading economic indicators rose 0.3 percent in June, topping the 0.2 percent median forecast in a Bloomberg News survey of economists, and a Federal Reserve gauge of manufacturing in the Philadelphia region showed stronger-than-forecast growth.
To contact the editor responsible for this story: Nick Baker at email@example.com