US stocks improve on news from Greece
US stocks advanced yesterday as investors grew more optimistic that there would be a breakthrough in talks between Greece and its lenders.
Stocks also got a boost from deal news in the health care and energy sectors.
The Dow Jones industrial average added 103.83 points, or 0.6%, to 18,119.78. The Standard & Poor's 500 index rose 12.86 points, or 0.6%, to 2,122.85 and the Nasdaq composite climbed 36.97 points, or 0.7%, to 5,153.97.
European nations were cautiously optimistic yesterday that a deal on Greece's bailout was within reach this week, easing fears that the country would default on its debt and leave the euro region.
The country needs more loans from European lenders and the International Monetary Fund to enable it to make a June 30 debt payment.
Greece and its creditors have been negotiating for months over what economic reforms the Mediterranean nation should implement in return for the loans. US stocks slumped earlier this month, in part on investors' concerns that a Greek default could potentially cause turmoil in global financial markets.
"An eleventh hour compromise was always the likely scenario and it looks like that is what we are getting," said Russ Koesterich, global chief investment strategist at BlackRock.
The Greek stock market surged 9% and the yield on the 10-year Greek government bond dropped 1.48 percentage points to 10.90% as traders bought the bonds.
The main stock indexes in Europe closed broadly higher. Germany's DAX and France's CAC 40 each rose 3.8% and the U.K.'s FTSE 100 rose 1.7%
In the US, health insurers Cigna and Anthem were sharply higher after Anthem made a 47 billion dollar bid to buy its competitor. Anthem, which runs the largest Blue Cross Blue Shield health insurance network, was up 5.98 dollars, or 3.6%, to 171.04 dollars. Cigna was up 7.34 dollars, or 4.7%, to 162.60 dollars.
Cigna described the bid as "inadequate" and not in the best interests of its shareholders.
Other health insurers rose on speculation of more mergers in the industry. Aetna rose 3.98 dollars, or 3.2%, to 128.05 dollars.
In the energy markets, the price of oil finished little changed from Friday. Benchmark US crude rose 7 cents to close at 59.68 dollars a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 32 cents to close at 63.34 dollars in London.
