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US stocks gain after Greek deal and strong earnings; Dow nears 13,000 for first time since '08
NEW YORK (AP) ' The Dow Jones industrial average made a run at 13,000 on Tuesday, powered higher by a long-awaited bailout deal for Greece and strong corporate earnings reports at home.
The Dow came within five points of the milestone an hour and a half into the trading day. Just after 11 a.m. EST, the average was up 43 points at 12,993.
The Dow hasn't seen 13,000 since May 20, 2008, before a financial crisis brought the U.S. economy to its knees. In May 2008, the investment bank Lehman Brothers was still solvent, and unemployment was 5.4 percent, compared with 8.3 percent today.
In other trading Tuesday, the Standard & Poor's 500 was up five points at 1,366. The Nasdaq composite index was up nine at 2,960.
Under the bailout deal, Greece will get '130 billion, or about $172 billion, from other European nations and the International Monetary Fund. It will also owe '107 billion less to investors who own its government bonds.
After months of the talks crawling along and vague headlines yanking the market up and down, the conclusion was almost anticlimactic, with an agreement already expected by the markets.
European markets fell after the Greece deal was announced. Stocks were down almost 4 percent in Greece, a little more than 1 percent in Spain and less than 1 percent in France and Britain. But the euro rose slightly at $1.32, which could be seen as a sign of confidence in European markets.
Investors noted that Greece remains in deep recession. Its private-sector investors were also forced to take a 53.5 percent loss on the face value of their bonds, which could discourage future investment.
The U.S. stock market has climbed steadily this year, primarily because of optimism about the economy. High gasoline prices are emerging as a chief concern for the economic recovery for the rest of the year, though.
A gallon of regular costs $3.57 on average, 40 cents more than a year ago and the highest on record for this time of year. With tension building over Iran's nuclear ambitions, Iran has halted oil exports to Britain and France and threatened to stop shipping to other European countries.
On Tuesday, U.S. markets enjoyed strong earnings reports from several big-name companies, including Home Depot and Dollar Thrifty. The exception was Wal-Mart, which reported a 15 percent drop in quarterly profits.
Overall, though, investors seemed comfortable moving money into the higher-risk stock market and out of safer investments like government bonds. The yield on the government's benchmark 10-year Treasury note rose to 2.05 percent from 2.01 percent Friday, a sign that fewer investors wanted the bonds.
Among big movers Tuesday:
'Wal-Mart fell 4 percent after missing analysts' expectations for revenue and per-share earnings. The world's biggest retailer has lost some of its momentum in the past couple of years with strategic errors like a brief foray away from "everyday low prices," which turned off cash-strapped bargain hunters, and a short attempt to declutter its shelves and offer fewer items, which turned off customers who went there for the convenience.
'Home Depot rose 2 percent after beating analysts' expectations for revenue and per-share earnings. The home-repair giant has been hurt by the dour housing market, which has led homeowners to take on fewer expensive home renovations. Warm weather helped drive small-scale home projects in the latest quarter.
'Barnes & Noble climbed 5 percent despite missing expectations on revenue and per-share earnings, as rising costs offset higher sales of both traditional books and digital books. But investors seemed encouraged that the bookstore chain, a survivor in an era that has felled competitors like Borders and Waldenbooks, plans to introduce a cheaper Nook to compete with Amazon's Kindle Fire. It's also been shifting store inventory away from books toward games, toys and other gifts, a strategy that seems to be paying off.