By Corrie Driebusch
U.S. stocks rose to fresh all-time highs Friday afternoon as the
eurozone approved a four-month extension on Greece's bailout.
The Dow Jones Industrial Average rose 141 points, or 0.8%, to
18127 and the S&P 500 gained 11 points, or 0.5%, to 2108, with
both indexes hitting fresh intraday records. The Nasdaq Composite
rose 27 points, or 0.5%, to 4951. Before reports of an extension
between Greece and its creditors, stocks were little changed.
The four-month extension provides that Athens submit by Monday
details on the reform and budgetary measures it plans to take,
according to Austrian finance minister Hans Jörg Schelling. It
falls short of the six months Greece had requested Thursday.
The euro climbed against the dollar as news of the deal spread.
It recently traded at $1.1390 after being as low as $1.1290 earlier
in the day.
"The market in the last two weeks has been clearly believing it
wouldn't be a big issue, that eventually they would come to some
agreement," said Steve Jue, senior research analyst at Rainier
Investment Management, which manages $6.1 billion. "I think having
Europe work through that process has given investors more
confidence that we're not going to have a macro shock related to
Greece."
In recent sessions, investors have been rather complacent about
the negotiations between Greece and its creditors, with U.S. stocks
making few big moves. On Thursday, Germany rejected a Greek
proposal to extend its bailout program, but many investors said
they were confident that a deal eventually would be reached that
would prevent Greece from leaving the eurozone.
The muted market moves in the past several sessions "suggests
investors have learned from past episodes that what we tend to see
is a lot of posturing and then a last-minute deal," said Kate
Warne, investment strategist at Edward Jones.
For the week, the Dow has lost 0.2% and the S&P has added
less than 0.1%, through Thursday's close.
Traders said buying and selling activity was subdued Friday
prior to news of an agreement between Greece and its creditors.
Stocks were also quiet in Europe and Asia, where many markets were
closed for the Lunar New Year holiday. European stocks were little
changed, with France's CAC 40 down 0.1% and Germany's DAX rising
0.4%. Japan's Nikkei Stock Average rose 0.4% to another 15-year
high.
Global stocks have hit multiyear highs or records in recent
sessions, supported by easing actions at central banks. The Stoxx
Europe 600 closed at its highest level since late 2007 on Thursday,
while the DAX ended Thursday at its 13th record of the year. The
Nasdaq is trading at a 15-year high.
"I can't underscore enough the significance of this ECB
quantitative-easing program," said Greg Sarian, managing director
and partner at HighTower Advisors. "You now have all the major
central banks around the world keeping rates low," he said, which
will help stocks outperform bonds again this year.
Even when the Federal Reserve raises interest rates, if the pace
is modest, it shouldn't prevent U.S. stocks from notching gains for
the year, he added.
Treasury prices, which had inched higher in early Friday
trading, retreated after reports of a bailout extension for Greece.
The 10-year note yield rose to 2.125% from 2.112% on Thursday.
U.S. oil prices declined, with crude-oil futures down 1.6% at
$50.34 a barrel, weighing on oil and gas companies. Shares of
energy companies in the S&P 500 shed 0.8%.
Gold futures sagged 0.2% to $1,204.40 an ounce.
Among individual stocks, Newmont Mining Corp. shares rose 5.2%
as the gold miner swung to a profit in the fourth quarter, largely
on the sale of its stake in its Penmont joint venture to
precious-metals miner Fresnillo PLC.
Shares of Intuit Inc. rose 6.1% after its chief financial
officer said Thursday that the online tax-software company hasn't
seen any indications that its systems were breached in connection
with a wave of fraudulent tax-return filings this month.
Fannie Mae said its profit declined in the most recent quarter
while it again warned that more declines are likely in the future.
Shares fell 3.3%.
Saumya Vaishampayan contributed to this article.
Write to Corrie Driebusch at corrie.driebusch@wsj.com and Saumya
Vaishampayan at saumya.vaishampayan@wsj.com
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