U.S. stocks rose, sending the Dow Jones Industrial Average to the highest level since May 2008, while Treasuries fell and the euro strengthened as Greece’s government made progress on measures to secure international aid. Crude oil led gains in commodities.
The Dow increased 33.07 points, or 0.3 percent, to close at 12,878.2 at 4 p.m. in New York and the Standard & Poor’s 500 Index increased 0.2 percent after slipping as much as 0.6 percent earlier. Ten-year Treasury yields increased seven basis points to 1.98 percent and the euro advanced 0.9 percent to $1.3248, its strongest level in almost two months. Oil rallied 1.5 percent, the most in three weeks, to $98.41 a barrel.
Greece’s government and international creditors are working on the final draft of an agreement on budget and structural measures needed to free up a second aid package, a Greek official said. Prime Minister Lucas Papademos plans to convene the nation’s political leaders tomorrow morning to seek consensus on the required measures, as unions called a strike to protest and European leaders pressed Greece to reach a deal.
“Greece is on the front page again,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a telephone interview. His firm oversees $160 billion. “It’s been the theme for at least a year that you had to take these governments near the edge of the abyss and look into it before they would agree to additional cuts or fiscal tightening or other types of concessions to get money.”
The S&P 500 closed at a seven-month high. The index is up more than 7 percent so far in 2012 and has rallied almost 23 percent from last year’s low in October amid improving economic data and better-than-estimated earnings.
Coca-Cola Co. helped lead gains in the Dow today after the world’s largest soft-drink maker reported fourth-quarter profit that topped analysts’ estimates as teas and juices boosted sales in Asia.
Yum! Brands Inc., owner of the KFC and Taco Bell fast-food chains, climbed 2.6 percent after reporting a 30 percent increase in profit. McDonald’s Corp., which is scheduled to report same-store sales tomorrow, rose 1.4 percent. Walgreen Co., the largest U.S. drugstore chain, slipped 2.4 percent after Citigroup Inc. cut its recommendation for the shares.
Walt Disney Co. was among seven companies in the S&P 500 scheduled to release earnings after markets close today, according to data compiled by Bloomberg. Profits have beaten estimates at about 68 percent of the 280 companies in the S&P 500 that have released results since Jan. 9, data compiled by Bloomberg show. Earnings-per-share have increased 3.5 percent for the group on a 6.5 percent increase in sales.
U.S. Treasuries remained lower after the U.S. sold $32 billion of three-year notes in the first of three auctions this week totaling $72 billion. Existing three-year yields increased three basis points to 0.34 percent. The dollar weakened against 13 of 16 major peers.
Federal Reserve Chairman Ben S. Bernanke repeated that the job market is still far from healthy after signs of economic improvement over the past year, and he called on U.S. lawmakers to reduce the long-term budget deficit.
“We still have a long way to go before the labor market can be said to be operating normally,” Bernanke said in testimony prepared for the Senate Budget Committee that is identical to remarks he gave on Feb. 2 to the House Budget panel. “Particularly troubling is the unusually high level of long-term unemployment.” The jobless rate unexpectedly fell to 8.3 percent in January, a government report showed last week.
Silver, aluminum and gold climbed at least 1.4 percent for the biggest gains, after oil, among the 24 commodities tracked by the S&P GSCI Index. The commodities gauge increased 0.7 percent to the highest level since August. Corn fell for a second day and soybeans dropped for the first time in a week as rain improved prospects for crops in Argentina and Brazil that have been hurt by unusually dry weather.
The Stoxx Europe 600 Index slipped 0.3 percent, paring a loss of as much as 1 percent. Swatch Group AG sank almost 4 percent after the largest Swiss watch maker reported 2011 operating profit that missed analysts’ estimates. Alfa Laval AB, the world’s biggest maker of heat exchangers, sank 7.1 percent as fourth-quarter orders declined from the previous three months because of contraction in the shipbuilding industry.
Greek Prime Minister Papademos will meet with the leaders of the three parties supporting his government tomorrow morning, instead of tonight as previously scheduled, a spokeswoman for his office said. Papademos will meet later today instead with the heads of the so-called troika, who represent the European Commission, the European Central Bank and the International Monetary Fund, to put the final touches to a document on terms required from Greece to qualify for a second rescue package, the spokeswoman said.
The MSCI Emerging Markets Index added 0.1 percent as gains in Brazil and Colombia were offset by declines in Asia. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong dropped 0.6 percent. The Shanghai Composite Index slid 1.7 percent, the most in six weeks, after China’s government said industrial output growth is likely to slow this quarter as the world economy cools and Europe’s debt crisis worsens.
A “hard landing” for China is a key risk for the global economy, Andrew Colquhoun, the Hong Kong-based head of Asia-Pacific ratings for Fitch Ratings, said in an e-mail.
The yen weakened versus all 16 most actively traded peers after Finance Ministry data released today showed Japan conducted 1.02 trillion yen ($13.3 billion) worth of unannounced intervention during the first four days of November, after selling a record 8.07 trillion yen on Oct. 31, when the yen climbed to a post World War II high of 75.35 per dollar.
The Australian dollar appreciated 0.7 percent to $1.0804 after the Reserve Bank of Australia signaled optimism global economic growth will strengthen.