Wall Street opened on a high note on Friday amidst hopes that Greece would strike a deal with its creditors and China’s stock market will continue the comeback in made Thursday after weeks of stock selloffs. All three major indexes were up more than 1 percent.
US markets had fallen earlier in the week due to concern over the outcome of the financial crisis in Greece and fears of a potentially long-term economic slump in China. But now the market appears to be correcting itself, experts said.
Greece’s government representatives will meet with the Euro zone finance ministers on Saturday to determine whether the two sides can reach an agreement on the conditions of a third bailout for the embattled southern European country.
After months of disaccord, negotiations seemed to be taking a positive turn on Thursday, injecting a bit of hope into the market Friday. European creditors expressed a willingness to discuss an easing of Greece’s debt burden, while Athens offered a range of proposals to reduce its spending, including tax hikes, pension cuts, and a slashing of the state budget.
Although an agreement between Greece and its creditors is still not a done deal, Ric Spooner, chief market analyst at CMC Markets told the Associated Press:
"Greece's proposal to its European creditors appears to significantly improve the prospects for a weekend agreement on extending further credit.”
Meanwhile, China's Shanghai Stock Exchange Composite Index jumped 6.6 percent to 3,954.83. The index was up 1.1 percent compared to the previous week.
Chinese Premier Li Keqiang said Beijing plans to make more changes to its policies to support the economy.
“As the stock market dipped over the past several weeks, the Chinese government eased borrowing measures and began encouraging investors to put more money in stocks,” the Monitor reported Thursday.
“Furthermore, the country’s largest brokerage firms have banded together to create a $19.4 billion stabilization fund to alleviate the market and even buy stock funds themselves…. Still, none of these measures seemed to be staving off panic selling, until Thursday.”
Now, all US exchanges appear to be responding to the wave of optimism.
Around 10 a.m. on Friday, the S&P 500 advanced 21 points, or 1 percent, to 2,073. The Dow Jones Industrial Average jumped 178 points, or 1 percent, to 17,725, with all 30 of its components trading higher. The Nasdaq Composite also rallied 52 points, or 1 percent at 4,974.
This report includes material from the Associated Press and Reuters.