U.S. stocks rose while Treasuries fell amid optimism Greece will forge a solution to its debt crisis and as investors awaited jobs data that may show the labor market is strengthening. The dollar advanced, while American oil tumbled the most in three months as crude stockpiles increased.
The Standard & Poor’s 500 Index added 0.7 percent by 4 p.m. in New York. The Stoxx Europe 600 Index jumped 1.5 percent after two days of declines as Greece signaled it was ready to compromise on ending a standoff over bailout aid. Yields on 10-year Treasuries advanced seven basis points to 2.42 percent. The Bloomberg Dollar Spot Index climbed 0.7 percent as the euro and yen lost at least 0.5 percent. U.S. oil sank 4.2 percent.
Global equities rebounded, while haven assets retreated as Greece offered to accept certain terms needed to end its monthslong standoff with creditors. The nation will hold a referendum on creditors’ demands Sunday, with support for the ‘yes’ vote in front in an opinion poll. U.S. data Thursday is forecast to show employers bolstered hiring last month, potentially supporting the case for higher interest rates.
“The prospects of removing some of the macroeconomic uncertainty associated with Greece is boosting stocks,” said Mark Luschini, chief investment strategist in Philadelphia a Janney Capital Management LLC, which oversees about $68 billion. “We also got an ADP report this morning that was much better than expected, which bodes well for tomorrow morning’s payroll report.”
Companies in the U.S. added 237,000 workers in June, the most in six months, data from Automatic Data Processing Inc. showed Wednesday. A separate report showed manufacturing expanded in June at the fastest pace in five months, indicating domestic demand is allowing American factories to withstand sluggish overseas economies.
The S&P 500 rose as much as 1 percent earlier in the Wednesday session, before paring the gain. Optimism Greece would forge a deal was tempered after Prime Minister Alexis Tsipras urged his citizens to reject the referendum and Eurogroup head Jeroen Dijsselbloem said talks would not occur until after the ballot.
Moody’s Investors Service joined S&P in cutting Greece’s credit rating after U.S. markets closed Wednesday. The country missed a debt payment to the International Monday Fund late Tuesday Washington time, spurring the European Central Bank to meet in Frankfurt to consider their response.
The S&P 500 sank 2.1 percent on Monday, the most in more than a year, while the Stoxx 600 tumbled 3.9 percent in two days after Tsipras’s surprised negotiators by calling the referendum.
Treasury rates have recouped most of Monday’s 15 basis-point decline, while yields on German bunds have retraced about half of their slide. The euro weakened 0.8 percent to $1.1052 Wednesday, reinforcing a trading pattern that has seen it act as a haven asset. The currency has tended to rise on negative headlines about Greece and retreat on signs the beleaguered nation may be edging toward a deal.
“News flow out of Greece is dictating whether risk is off or on,” said Steven Santos, a broker at Banco de Investimento Global SA in Lisbon. “It’s just time for the market to consolidate after some very heavy losses. Maybe there’s hope of a last-minute deal on Greece.”
Though Greece is setting the tone for global markets, investors also have an eye on the U.S. economy, with the government’s June payrolls report due Thursday. American markets are closed for a holiday Friday.
The Federal Reserve is scrutinizing incoming data for signs the world’s largest economy can withstand the first rate increase since 2006. Futures show a 35 percent chance policy makers will boost the benchmark rate in September and 72 percent odds by December, according to data compiled by Bloomberg.
Financial shares in the S&P 500 capped the biggest one-day gain since June 10 on Wednesday as Chubb Corp. surged 26 percent after Ace Ltd. agreed to buy the insurer. Travelers Cos. gained 2.7 percent, the most since January. Energy companies retreated 1.3 percent amid the selloff in crude.
U.S. airline shares tumbled on reports the Justice Department was investigating whether carriers were colluding to help prop up airfares.
Germany’s DAX Index climbed 2.2 percent Wednesday, after being the worst performer among developed markets in the second quarter. Markets in Greece are closed this week with capital controls in place to prevent a run on banks.
The Global X FTSE Greece 20 exchange-traded fund added 5.9 percent in a second day of gains. The ETF rebounded 6 percent on Tuesday after tumbling 19 percent at the start of the week. American depositary receipts of National Bank of Greece SA jumped 7.6 percent after sliding 24 percent on Monday.
Italy’s 10-year bond yields declined five basis points, or 0.05 percentage point, to 2.28 percent and Spanish rates dropped four basis points to 2.27 percent. Portugal’s bonds rose, with yields falling eight basis points to 2.93 percent. They’re still above the 2.72 percent reached on June 26.
The MSCI Emerging Markets Index closed little changed, erasing earlier gains of as much as 0.4 percent. Hong Kong markets were closed for a holiday.
The gauge of developing-nation stocks retreated as data showing Chinese manufacturing remained sluggish in June overshadowed any optimism over Greece for some markets.
The Shanghai Composite Index -- which has been one of the best performing gauges worldwide this year -- slid for the fourth time in five days, sinking 5.2 percent Wednesday as margin traders unwound positions.
Chinese regulators are considering suspending initial share offerings, people familiar with the matter said Monday, to try and halt the selloff in local equities. The Economic Observer reported stamp duties may be cut. The People’s Bank of China cut benchmark rates for the fourth time since November this week in a bid to shore up the slowing economy.
Singapore-traded futures on the FTSE China A50 Index gained 3.3 percent in recent trading, while contracts on the country’s CSE 300 Index slipped 3.7 percent.
West Texas Intermediate oil slid to $56.96 a barrel in its steepest one-day slump since April. Selling accelerated after a U.S. government report showed crude stockpiles increased by 2.39 million barrels last week, exacerbating concerns over a global supply glut. Analysts surveyed by Bloomberg had projected a decline.
Brent crude futures slid 2.5 percent in London to end the session at $62.01 a barrel. Production from the Organization of Petroleum Exporting Countries accelerated last month to the highest level since August 2012 as Iraq pumped at a record, a Bloomberg survey showed.
Elsewhere in commodity markets, wheat tumbled the most in 11 weeks, losing 4.4 percent on the Chicago Board of Trade after U.S. inventories topped analysts’ estimates. Industrial metals rallied in London amid optimism over Greece. Zinc and aluminum surged more than 2 percent.