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Stock markets rise as optimism builds about Greek debt exchange; investors shrug off jobs data
NEW YORK (AP) ' Stocks market gains accelerated Thursday on indications that a deal to restructure Greece's debt would succeed. That overshadowed a small increase in applications for unemployment benefits last week.
The Dow Jones industrial average was up 90 points, or 0.7 percent, at 12,927 in late afternoon trading.
The Standard & Poor's 500 index, a broader measure of the market, gained nearly 15 points, or 1.1 percent, to 1,367. All 10 industry sectors rose, led by materials companies. The Nasdaq composite index rose 36 to 2,972.
The market was headed for its second straight increase following a 203-point plunge in the Dow Tuesday, the first triple-digit loss for the index since the start of the year. Together with Wednesday's 78-point gain, the Dow has now made up more than half of that loss.
Friday marks the three-year anniversary of the stock market's bottom following the financial crisis. The S&P 500 and the Dow have both roughly doubled since then.
The gains came as private investors in Greek bonds reached a 3 p.m. EST deadline for deciding whether to swap $140 billion in Greek government bonds for new ones worth much less. Greek government officials told The Associated Press that participation was already above 75 percent, nearing the 90 percent rate needed for the swap to be successful.
Athens will release final results Friday morning. If creditors holding more than 75 percent signed up, that can trigger legislation forcing holdouts to go along.
The gains came despite a report from the Labor Department early Thursday that the number of people seeking unemployment benefits rose slightly more than expected last week. The four-week average, however, remained near a four-year low, however, and applications are down 14 percent since October.
The government will issue its February jobs report on Friday, and economists are expecting more than 200,000 net jobs were added. If that prediction is correct, it would likely translate into a drop the unemployment rate for the sixth straight month, from 8.3 percent in January.
"The trend here is that the job market has continued to grind higher, and I don't see any reason why tomorrow's number shouldn't be a good one," said Phil Orlando, chief equity market strategist at Federated Investors. He pointed to a private estimate of hiring released Wednesday that exceeded expectations, along with the unemployment claims figures, as good indicators for more positive news to come.
Signs of life in housing and rising consumer spending in the U.S., along with the positive developments for the European debt crisis, are also helping boost confidence in the economy.
Stocks rose around the world as optimism about the Greek debt deal took hold. In Europe, the FTSE 100 index of leading British stocks closed up 1.2 percent. Germany's DAX and the CAC-40 in France both gained 2.5 percent.
The euro rose against the dollar. In another sign of investor confidence in Europe, the yields on government bonds of both Italy and Spain both fell.
Asian markets also rallied, ending a three-day losing streak. Japan's Nikkei Stock Average climbed 2 percent, Hong Kong's Hang Seng jumped 1.3 percent and China's Shanghai Composite Index rose 1.1 percent.
The positive view on the Greek deal also helped push oil prices higher, as resolving the crisis is seen as good for the European economy, where demand could rise. Oil closed near $107 per barrel on the New York Mercantile Exchange. Gold prices also rose.
The yield on the benchmark 10-year U.S. Treasury note rose to 2.01 percent from 1.98 percent late Wednesday.
Brian Gendreau, market strategist for El Segundo, Calif.-based Cetera Financial Group, said that even if some of Greece's private investors reject the bond swap deal, the situation in Europe is clearly improving.
"A year and a half ago, the idea that private bond holders would take a hit wasn't even on the table," Gendreau said.
Gendreau's sense is that the market's response to a possible Greek default would not be as harsh as it might have been last year, when there were predictions the euro could collapse. He would expect a reaction that reflects more "fatigue and exasperation. But that's not the same as panic and crisis."
Among the stocks making big moves Tuesday:
' Coach Inc. jumped nearly 5 percent after the luxury accessories maker said it is sticking to its long-term sales goals.
' McDonald's Corp. lost more than 3 percent after reporting slower growth in February.
' Simon Property Group Inc. fell about 2 percent after the largest mall operator in the U.S. announced two real estate deals that total $3.5 billion, including a $2 billion investment in Europe.