US stocks gain on hopes for Greece deal

Traders work on the floor of the New York Stock Exchange shortly after the opening bell.
Traders work on the floor of the New York Stock Exchange shortly after the opening bell.REUTERS

NEW YORK (AFP) - US stocks gained on Wednesday, following European equities higher on hopes for a deal with Greece as US data showed private-sector hiring accelerated in June.

The Dow Jones Industrial Average rose 138.40 points (0.79 per cent) to 17,757.91.

The broad-based S&P 500 advanced 14.31 (0.69 per cent) to 2,077.42, while the tech-rich Nasdaq Composite Index gained 26.26 (0.53 per cent) to 5,013.12.

European equities jumped as investors reacted positively to news of Greece's bid for a new bailout.

 

Euro zone policymakers said they would not negotiate until Sunday's referendum in Greece on creditors' reforms.

"The market today took its cue from the European markets," said Peter Cardillo, chief market economist at Rockwell Global Capital.

"We're basically hopeful of a deal."

US businesses added 237,000 jobs last month, up from 203,000 in May and the best level since December, according to payroll firm ADP.

The Department of Labour will release the official US jobs report for June on Thursday. Analysts expect a gain of 230,000 jobs.

Airline stocks tumbled on news that the Justice Department is investigating some carriers for "possible unlawful coordination."

American Airlines fell 2.8 per cent, Delta Air Lines lost 2 per cent and United Continental shed 2.5 per cent.

Insurer Chubb soared 26.1 per cent on news it will be acquired by Swiss insurer Ace Limited for US$28.3 billion (S$38 billion).

Ace rose 0.8 per cent.

Other insurers also rose, including Progressive (+2.2 per cent) and Travelers (+2.7 per cent).

DirectTV rose 1.2 per cent on reports Justice Department antitrust regulators will approve its acquisition by AT&T for US$48.5 billion.

Approval is still pending in the Federal Communications Commission, Bloomberg News said.

Spice company McCormick fell 1.7 per cent after second-quarter sales of US$1.02 billion lagged analyst forecasts for US$1.04 billion.

Department store Macy's rose 0.4 per cent as it severed ties with billionaire presidential candidate Donald Trump, announcing it would end the Trump clothing line following his remarks about Mexican immigrants.

Wearables company Fitbit bolted 10.9 per cent higher after RBC Capital Markets initiated coverage and predicted strong growth.

Cable giant Comcast rose 3.5 per cent following a Brean Capital report recommending the stock.

Bond prices fell. The yield on the 10-year US Treasury advanced to 2.42 per cent from 2.36 per cent Tuesday, while the 30-year rose to 3.21 per cent from 3.13 per cent. Bond prices and yields move inversely.