News Of Greek Deal Lifts Stocks To New Record Highs - U.S. Commentary

(RTTNews) - After coming under pressure in early trading on Friday, stocks showed a substantial turnaround following the latest news regarding the Greek debt negotiations. The gains lifted the Dow and the S&P to new record closing highs, while the Nasdaq reached its best levels since early 2000.

The major averages moved roughly sideways going into the close, hovering near their best levels of the day. The Dow jumped 154.67 points or 0.9 percent to 18,140.44, the Nasdaq climbed 31.27 points or 0.6 percent to 4,955.97 and the S&P 500 rose 12.85 points or 0.6 percent to 2,110.30.

With the gains on the day, the major averages all moved higher for the week. The Nasdaq surged up by 1.3 percent, while the Dow and the S&P 500 advanced by 0.7 percent and 0.6 percent, respectively.

The strength that emerged on Wall Street came on the heels of news that Greece reached a deal with eurozone creditors to extend its bailout agreement for four months.

A statement from the Eurogroup said the extension will give negotiators time to work out a possible follow-up arrangement.

The deal calls for Greek and European officials to agree to a series of reforms by the end of April, with Greece due to present a first list of reform measures on Monday.

The Eurogroup statement also suggests that Greece has agreed to keep existing austerity measures in place even though the Syriza party swept to victory on an anti-austerity platform.

While the four-month extension may only delay the inevitable, news of the deal has eased concerns about Greek making a destabilizing exit from the eurozone.

The Eurogroup stressed that it remains committed to providing adequate support to Greece as long as it honors its commitments within the agreed framework.

Among individual stocks, shares of Intuit (INTU) moved notably higher on the day after the accounting software developer reported a narrower than expected second quarter loss.

Newmont Mining (NEM) also turned in a strong performance after reporting fourth quarter earnings and revenues that came in above analyst estimates.

On the other hand, shares of Rocket Fuel (FUEL) fell sharply after the online advertising company reported a narrower than expected fourth quarter loss but provided disappointing guidance.

Sector News

Airline stocks turned in some of the market's best performances on the day, driving the NYSE Arca Airline Index up by 1.6 percent. With the gain, the index reached its best closing level in almost a month.

Hawaiian airlines parent Hawaiian Holdings (HA) and Delta (DAL) posted strong gains, with both climbing by 3.3 percent.

Considerable strength also emerged among biotechnology stocks, as reflected by the 1.4 percent gain posted by the NYSE Arca Biotechnology Index. The gain extended a recent upward move by the index, which reached a record closing high.

Trucking, healthcare, and commercial real estate stocks also saw notable strength, moving higher along with most of the other major sectors.

On the other hand, significant weakness remained visible among oil service stocks, with the Philadelphia Oil Service Index falling by 1.2 percent. The weakness in the sector came as crude for April delivery slid $1.02 to $50.81 a barrel.

Other Markets

In overseas trading, many of the stocks markets across the Asia-Pacific region remained closed for Lunar New Year holidays on Friday. The markets there were open turned in a mixed performance. Japan's Nikkei 225 Index rose by 0.4 percent, while Australia's All Ordinaries Index fell by 0.4 percent.

The major European markets also ended the day mixed. While the French CAC 40 Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index both rose by 0.4 percent.

In the bond market, treasuries pulled back sharply following the Greek news, ending the day in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.0 basis points to 2.133 percent.

Looking Ahead

Further developments regarding Greece could attract attention next week, although the focus is likely to shift to the outlook for U.S. monetary policy.

Federal Reserve Chair Janet Yellen is scheduled to testify before both the House and the Senate, with traders likely to closely watch her remarks for hints about when the central bank plans to begin raising interest rates.

Trading could also be impacted by reaction to reports on new and existing home sales, consumer prices, durable goods orders, and fourth quarter GDP.

On the earnings front, Home Depot (HD), Macy's (M), Toll Brothers (TOL), Hewlett-Packard (HPQ), and Target (TGT) are among the companies due to report their quarterly results next week.