Stocks Move Sharply Higher Amid News Of Greek Deal - U.S. Commentary

(RTTNews) - Following the substantial volatility seen last week, stocks have moved notably higher in early trading on Monday. The major averages have shown strong moves to the upside, climbing further off the multi-month lows set last Wednesday.

In recent trading, the major averages have pulled back off their highs for the young session, but they remain firmly positive. The Dow is up 190.28 points or 1.1 percent at 17,950.69, the Nasdaq is up 57.55 points or 1.2 percent at 5,055.25 and the S&P 500 is up 18.35 points or 0.9 percent at 2,094.97.

The early rally on Wall Street comes amid news Greece and its international creditors have finally reached an agreement on a new bailout for the debt-laden country.

After hours of negotiations, Greece and its creditors reached a conditional agreement that consists of several tough austerity measures.

European Council President Donald Tusk said the agreement comes with strict conditions but places Greece on a path of growth and helps regain trust.

"We had only one objective: to reach an agreement." Tusk said in a press conference. "After 17 hours of negotiations, we have finally reached it. One can say that we have 'agreekment.'"

He added, "Leaders have agreed in principle that they are ready to start negotiations on an [European Stability Mechanism] program, which in other words means continued support for Greece."

The news has generated considerable positive sentiment, although the intricacies and complexities involved have led to continued skepticism among some analysts.

Jonathan Loynes, Chief European Economist at Capital Economics, said the tentative deal clearly reduces the risk of Greece exiting the eurozone but noted significant hurdles must still be overcome.

"And the negotiations over debt restructuring, which have been put off again, may yet prompt a Grexit," Loynes said.

Nonetheless, airline stocks are leading the markets higher once again, with the NYSE Arca Airline Index surging up by 2.4 percent. The index has moved sharply higher since hitting an eight-month closing low last Wednesday.

Internet, biotechnology, software and retail stocks are also seeing considerable strength, while gold stocks are among the few groups bucking the uptrend.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index surged up by 1.6 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent.

The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index has advanced by 0.8 percent, the German DAX Index is up by 1.4 percent and the French CAC 40 Index is up by 2 percent.

In the bond market, treasuries have moved moderately lower, extending the sharp pullback seen in the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.8 basis points at 2.445 percent.