U.S. Stocks Gain on Greece Pledge; Philip Morris Shares Climb
U.S. stocks rose to the highest level in a week after European leaders pledged to aid Greece and Philip Morris International Inc. announced a $12 billion share buyback.
Philip Morris International added 3.4 percent to $48.41, reversing a 1.6 percent retreat. Freeport-McMoRan Copper & Gold Inc. and Exxon Mobil Corp. led gains among materials and fuel producers as base metals and oil climbed in New York trading. Allegheny Energy Inc. jumped 10 percent after FirstEnergy Corp. said it would buy the utility for $4.7 billion.
The Standard & Poor’s 500 Index rose 0.7 percent to 1,075.58 at 11:49 a.m. in New York after falling as much as 0.7 percent. The Dow Jones Industrial Average advanced 84.19 points, or 0.8 percent, to 10,122.57.
European leaders ordered Greece to get the group’s highest budget deficit under control and said they were prepared to take “determined” action to staunch the worst crisis in the euro’s 11-year history. The accord left open how the European Union would respond to a fresh wave of speculative attacks against Greece or countries such as Spain and Portugal, which are also struggling to cut their budget deficits.
“The recent news on Greece has been very encouraging,” said Peter Jankovskis, who helps manage about $1.7 billion as co- chief investment officer at Oakbrook Investments in Lisle, Illinois. “Investors are growing more optimistic on their accord and more confident that the situation won’t have spillover effects to the U.S.”
Spanish Prime Minister Jose Luis Rodriguez Zapatero said the EU’s agreement brought stability. He spoke at a news conference in Brussels today. Luxembourg Prime Minister Jean- Claude Juncker, who heads the panel of euro-region finance ministers, said all euro nations are ready to help Greece.
EU officials reached an agreement to deal with Greece’s debt crisis, European Commission President Jose Barroso said. “There is an accord, the presidency will announce it,” Barroso told reporters before an EU summit in Brussels today.
Speculation that Greece and nations such as Spain and Portugal are unable to repay their debt caused stocks to plunge on Feb. 4, driving the S&P 500 down 3.1 percent in its biggest drop since April. Investors bet that defaults would end the economic recovery that began almost a year ago.