Stocks rose on Tuesday, the fourth straight day, on hopes that Greece would avoid a default. A successful vote could reassure investors that Greece will push through budget cuts required to get the latest installment of emergency loans.
NEW YORK (AP) — Stocks rose for a fourth day straight Tuesday on hopes that a vote of confidence in the Greek government will help the country avoid a default.
The vote is expected late Tuesday. A successful vote could reassure investors that Greece will push through budget cuts required to get the latest installment of emergency loans. Worries that a default by Greece could lead to a wider financial crisis have been a drag on markets since early May.
Materials producers and other companies whose profits are closely tied to global economic growth had the biggest gains Tuesday. Aluminum producer Alcoa Inc. rose 4 percent, leading the 30 companies that make up the Dow. Gains were widespread, with nine out of 10 industry groups higher. Only consumer goods saw a decline.
“One of the reasons we’re more positive than negative on stocks is that there’s so much bad news priced into the markets right now,” said Eric Thorne, an investment adviser and senior vice president at of Bryn Mawr Trust Wealth Management, which has $4 billion in assets under management. “The bar has been set so low for housing and jobs that it makes us feel like we may be able to jump over that low bar.”
The S&P 500 index rose 17.16 points, or 1.3 percent, to close at 1295.52. The last time the S&P rose four days straight was at the end of May.
The Dow Jones industrial average rose 109.63, slightly less than 1 percent, to 12,190.01. The Nasdaq composite rose 57.60, or 2.2 percent, to 2,687.26.
Before posting a small gain last week, stocks indexes fell for six straight weeks after reaching a peak for the year on April 29.
Another reason stocks are rising is that analysts expect corporate earnings growth to remain strong. That’s despite more than a dozen reports since May that showed the U.S. economy has slowed. Home prices and sales have declined, manufacturing growth has slowed and the job market remains weak.
Even so, analysts surveyed by FactSet forecast that companies in the Standard & Poor’s 500 index will earn 14 percent more in the second quarter compared with last year. Large U.S. companies begin reporting quarterly results in early July.
Carnival Corp. rose 4.2 percent after the cruise operator reported revenue and earnings that beat expectations.
Best Buy Co. rose 2.6 percent after increasing its quarterly dividend 7 percent, to 16 cents per share. The electronics retailer also approved a program to buy back up to $5 billion of its stock.
Walgreen, the biggest U.S. drugstore chain, fell 4.2 percent after saying negotiations to stay in Express Script’s pharmacy provider network have reached an impasse. Their deal, worth $5.3 billion in revenue this fiscal year, expires at the end of 2011.
European stocks climbed. The gains accelerated through the day after U.S. stocks moved higher. France’s CAC 40 index rose 2 percent, and Germany’s DAX index rose 1.9 percent.
The Federal Reserve began a two-day policy meeting Tuesday. Economists expect the central bank to keep interest rates at record lows, but most say the Fed won’t announce another round of bond buying to help boost the economy.
Six stocks rose for every one that fell on the New York Stock Exchange. Trading volume was 3.6 billion shares.