US stocks gain as Greece appears to be willing to negotiate
By STEVE ROTHWELL (AP)
NEW YORK (AP) — U.S. stocks rallied Wednesday on hopes that a deal between Greece and its creditors could be put together to prevent the country from exiting the euro. In deal news, Chubb Corp. surged after agreeing to be acquired by rival insurance company Ace Ltd. Investors also got some encouraging news on hiring and manufacturing a day before the government's monthly jobs report.
KEEPING SCORE: The Standard & Poor's 500 index rose 11 points, or 0.6 percent, to 2,075, as of 12:10 p.m. Eastern. The Dow Jones industrial average climbed 113 points, or 0.6 percent, to 17,732. The Nasdaq composite gained 26 points, or 0.5 percent, 5,013.
GREEK DEBT CRISIS: Hopes that Greece could reach a deal with its creditors were raised after Greek Prime Minister Alexis Tsipras wrote a letter to the nation's creditors and appeared to make concessions. Finance ministers from the 19-country eurozone are due to hold a teleconference over the new proposals. Stocks rose despite Greece's failure Tuesday to make a 1.6 billion-euro ($1.8 billion) debt payment due to the International Monetary Fund.
THE QUOTE: The market is still down for the week after plunging on Monday as talks between Greece and its creditors broke down and the Greek government called a referendum on the latest bailout deal.
"The developments in Greece ... seem to be driving sentiment more than anything," said Phil Orlando, chief equity strategist at Federated Investors. "What we're seeing now is a little bit of a bounce back based on a sentiment that we're getting close to a resolution."
EUROPEAN STOCKS: The CAC-40 in France rose 1.9 percent. Germany's DAX climbed 2.2 percent and the U.K.'s FTSE 100 index of leading European shares was 1.3 percent higher.
DEAL NEWS: Chubb jumped $28.74, or 31 percent, to $123.85 after rival insurer Ace said it was buying the company in a cash-and-stock deal valued at about $28.3 billion. The combined company plans to use the Chubb name and will have its main offices in Zurich, Switzerland, where Ace is based. The news pushed up the prices of other insurance companies.
ON THE U.S. ECONOMY: Investors got two encouraging reports on the economy. Payroll processor ADP said businesses added 237,000 jobs last month, up from 203,000 in May and the most since December.
A separate survey showed U.S. manufacturing growth improved in June. The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index rose to the highest level this year.
The government's monthly nonfarm payrolls report will be published on Thursday. Many economists expect that the Federal Reserve will raise its benchmark interest rate for the first time in a decade later this year if hiring continues to improve.
ENERGY: Oil prices fell after a report showed that crude stockpiles rose in the U.S. Benchmark U.S. crude fell $1.83 to $57.64 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, dropped 99 cents to $62.63 a barrel in London.
CURRENCIES AND BONDS: The euro fell 0.3 percent to $1.1089 while the dollar rose 0.6 percent to 123.10 yen. Bond prices fell, pushing the yield on the benchmark 10-year Treasury note up to 2.41 percent from 2.35 percent on Tuesday.