Stocks rally as Greek debt deal draws near
After falling as much as 60 points earlier in the day, the Dow closed up 5 points, at 12883 Wednesday as Greece appeared to close in on the cost-cutting deal it needs to keep from defaulting on its national debt.
New York — Stocks staged an afternoon-long rally and closed higher Wednesday as Greece appeared to close in on the cost-cutting deal it needs to keep from defaulting on its national debt.
The Dow Jones industrial average gained 5.75 points to close at 12,883.95 after falling as much as 60 points at midday. It was the Dow's highest close since May 19, 2008, the last time it finished above 13,000.
After three days of delays, Greek government leaders met in Athens to go over a deal on steep cuts in public spending demanded by the country's lenders. European leaders will meet Thursday in Brussels to discuss a €130 billion bailout for Greece.
Investors are worried that Greece will default on its debt next month, which could roil financial markets and cause major losses for banks and other investors that hold Greek debt. Several deadlines have passed without an agreement.
Stock trading has been relatively quiet this week after a slow but steady rise since the beginning of the year. The Dow has added 2 percent in February and is up 5.5 percent for the year.
Rick Fier, vice president of stock trading at Conifer Securities in New York, said he wasn't that worried that the market's advance has slowed this week. The S&P 500 is still up 7.3 percent for the year, and has fallen on only eight days in 2012.
Fier said he is concerned that the batch of earnings reports from U.S. companies for the last three months of last year "hasn't been as robust" as previous quarters. Revenue growth has slowed even though profits have been strong, he said.
Walt Disney reported earnings Tuesday that beat analysts' estimates, but its revenue growth fell short. Movie revenue fell as Disney released fewer big films in the quarter than in previous years. Revenue from DVD sales and interactive media also declined. Disney's stock rose 0.7 percent nevertheless.
Caesars Entertainment Corp., the big casino operator, soared on its first day of trading. Caesars went as high as $17.90, nearly double its offering price of $9 per share. It finished at $15.39, up 71 percent, but lost some of the gains in after-hours trading.
Caesars raised $16 million, a sliver of the more than $500 million its private owners hoped for when they first tried to go public in late 2010.
Ralph Lauren rose 9 percent after reporting higher net income and revenue in the latest quarter, a sign that wealthy customers are still spending even as the economy struggles with high unemployment. The purveyor of $1,000 dresses and handbags said holiday sales had been strong.
Buffalo Wild Wings, a chicken-and-beer chain that has bucked the trend of weak revenue dogging many of its competitors, shot up 17 percent after reporting income and revenue that easily beat analysts' estimates.
Sprint Nextel, the phone company, fell 2 percent after reporting a fourth-quarter loss. It added subscribers but had to pay dearly for them. Sprint started offering customers iPhones, but it had to subsidize them so customers could buy them for as little as $99.
OpenTable, which lets people book tables at restaurants online, plunged 12 percent. Investors had reservations about the company's cautious outlook. Executives said they expect the growth to slow this quarter in the number of diners it seats.
In other markets, Treasury prices were mostly flat, like stocks. The yield on the U.S. government's 10-year note was unchanged at 1.98 percent. The price of oil rose 0.3 percent to $98.71, and gold fell 1 percent to $1,736.20.