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US: Dow, S&P hit records after Greece earns bailout extension

Saturday, February 21, 2015 - 06:58
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[NEW YORK] The Dow and S&P 500 Friday bolted to fresh records after eurozone ministers agreed to extend Greece's bailout by four months.

The Dow Jones Industrial Average gained 154.67 points (0.86 per cent) to 18,140.44, notching its first record of 2015.

The broad-based S&P 500 rose 12.85 (0.61 per cent) to 2,110.30, while the tech-rich Nasdaq Composite Index jumped 31.27 (0.63 per cent) to 4,955.97.

The bailout will be extended as long as Greece sets out key reform commitments by Monday, Eurogroup chief Jeroen Dijsselbloem said following a meeting with finance ministers in Brussels.

Markets greeted the news, which removes the immediate threat of a Greek default, though analysts also expressed caution.

"For now, crisis averted," said Jack Ablin, chief investment officer at BMO Private Bank, adding that "there is a lingering cloud that's going to continue to hang over the eurozone." "It's terrific news but I wouldn't get too excited until a permanent deal is signed," said Chris Low, chief economist at FTN Financial.

The biggest gainer in the Dow was Boeing, which surged 3.0 per cent after Sterne Agee raised its price target on the stock by US$32 to US$196. The report predicted the aerospace giant would undertake large stock buybacks as its cash pile grows.

Nordstrom advanced 6.0 per cent on news comparable sales in the fourth quarter rose 4.5 per cent. The department store chain projected a 2-4 per cent rise in sales in 2015.

Metals producer Newmont Mining gained 4.6 per cent after the company reported US$15 million in the fourth quarter, compared with a US$1.2 billion loss last year. The company said gold production would "increase steadily" over the next three years.

Auction house Sotheby's rose 1.3 per cent after investor Marcato Capital Management demanded a US$500 million share buyback. Marcato holds about 7.4 per cent of the company.

Pharmaceutical company AbbVie jumped 3.9 per cent after hiking its quarterly divided by four percent.

Bond prices were mixed. The yield on the 10-year US Treasury rose to 2.12 per cent from 2.11 per cent, while the 30-year fell to 2.72 per cent from 2.74 per cent. Bond prices and yields move inversely.

AFP