US stocks surge on hopes for Greek breakthrough

A trader working on the floor of the New York Stock Exchange.
A trader working on the floor of the New York Stock Exchange.PHOTO: BLOOMBERG

NEW YORK (AFP) - US stocks powered higher Friday as the latest bailout proposal from Greece lifted hopes for a breakthrough with creditors this weekend.

The Dow Jones Industrial Average gained 211.79 points (1.21 per cent) at 17,760.41.

The broad-based S&P 500 jumped 25.31 (1.23 per cent) to 2,076.62, while the tech-rich Nasdaq Composite Index surged 75.30 (1.53 per cent) to 4,997.70.

Stocks were in positive territory all day after Athens’s latest rescue plan conceded ground on major sticking points including tax and pensions. The proposal was welcomed by French and Italian officials, while German officials were more circumspect.

The surge in US markets is due to “optimism on the possibility of getting a deal with Greece,” said Bill Lynch, director of investment at Hinsdale Associates.

Banking stocks were strong with Dow member JPMorgan Chase gaining 1.4 per cent and Citigroup rising 1.6 per cent.

Apple snapped a five-day losing streak, advancing 2.7 per cent.

United Continental rose 4.2 per cent after it estimated that passenger revenue per mile, a key benchmark, fell between 5.25-5.75 per cent in the second quarter, consistent with analyst expectations. The figure “while disappointing versus earlier quarter hopes, did not deteriorate more than expected,” said Barclays.

American Airlines rose 3.9 per cent after trimming its forecast for adding seat capacity in 2015 to 1 per cent, down from the 2 per cent growth previously planned. The move is seen as likely to promote higher seat prices.

Biotech company Biogen lost 2.8 per cent on news that Douglas Williams, executive vice-president of research and development, will leave the company to lead an as-yet unnamed startup.

Online real estate listings company Zillow sank 7.8 per cent after announcing chief financial officer Chad Cohen will resign next month. Zillow said it was conducting a search for a new CFO.

News Corp rose 0.6 per cent ahead of next week’s launch of  Go Set A Watchman, the highly anticipated novel by Harper Lee. The first chapter of the book, which was published by HarperCollins, was printed in Friday’s Wall Street Journal. Both HarperCollins and The Wall Street Journal are owned by News Corp.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.40 per cent from 2.30 per cent Thursday, while the 30-year advanced to 3.19 per cent from 3.10 per cent. Bond prices and yields move inversely.