- Title: MARKETS-STOCKS-USA OPEN Wall Street opens higher on Greece deal
- Date: 13th July 2015
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (JULY 13, 2015) (REUTERS) (SOUNDBITE) (English) PAUL SHEARD, CHIEF ECONOMIST, STANDARD AND POOR'S, SAYING: "Now, were Greece to leave the euro zone there would be plusses and minuses. A plus of leaving the euro zone would be that Greece would be able to get a boost from some of the debt that is hanging over its head, and it will be ge
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- Story Text: Wall Street opened sharply higher on Monday (July 13) after euro zone leaders reached an agreement with Greece to move forward with a third bailout loan for the country to avert bankruptcy.
Greece won conditional agreement to receive a possible $95 billion (USD) over three years, along with an assurance that euro zone finance ministers would start discussing ways to bridge a funding gap until a bailout - subject to parliamentary approvals - is finally ready.
That will only happen if Greek Prime Minister Alexis Tsipras can meet a tight timetable for enacting unpopular reforms of value added tax, pensions and quasi-automatic budget cuts.
"I think the main implication for the global financial markets is that the potentially destabilizing even of a so called 'Grexit' an exit from the monetary union by Greece, an event that never supposed to happen," said Paul Sheard, Chief Economist of Standard and Poor's in New York.
"If that event will be avoided, that's certainly going to calm nerves around the global markets," he added.
Sheard said that if Greece were to leave the euro zone, it could have its benefits.
"A plus of leaving the euro zone would be that Greece would be able to get a boost from some of the debt that is hanging over its head, and it will be getting a boost from currency devaluation. But it would of course loose the benefits of being part of the euro zone, some of the disciplines that come with that and some of the advantages of being in that important developed world club," he explained.
World markets rose, while the dollar index gained 0.51 percent to $96.50 against a basket of major currencies following news of the deal. Chinese stocks rose for a third straight session as data showed exports increased while imports slipped in June, a tentative sign global demand might be on the mend.
At 9:40 a.m. ET (1340 GMT) the Dow Jones industrial average was up 166.36 points, or 0.94 percent, at 17,926.77. The S&P 500 was up 16.43 points, or 0.79 percent, at 2,093.05 and the Nasdaq composite was up 43.74 points, or 0.88 percent, at 5,041.44.
All the 10 major S&P 500 sectors were higher. The consumer discretionary index's 1.07 percent rise led the gains.
Financial stocks were also higher with the index gaining 0.99 percent, following the Greek debt deal. Big banks such as JPMorgan, Bank of America, Citigroup were all up 1 percent.
Oil prices tumbled as Iran and six world powers closed in on a nuclear deal that would end sanctions on the Islamic Republic and let more Iranian oil on to world markets.
However, the oil price slide boosted U.S. airline stocks. American Airlines, United Continental, JetBlue, Alaska Air were all up between 1.5 to up 2 percent.
Apple shares were up 1.1 percent at $124.64 after Socgen upgraded the company's stock to "buy" from "hold", saying it expected a successful launch of the new iPhone 6S handset in September.
The U.S. Treasury Department is scheduled to issue its June budget report at 2 p.m. ET (1800 GMT). The department is expected to post a budget surplus of $51.0 billion, compared with a $82.4 billion deficit reported in May.
Advancing issues outnumbered decliners on the NYSE by 2,095 to 615. On the Nasdaq, 1,735 issues rose and 583 fell.
The S&P 500 index showed 29 new 52-week highs and four new lows, while the Nasdaq recorded 76 new highs and 18 new lows. - Copyright Holder: REUTERS
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