News that Greece had reached a deal to secure a bailout was greeted with caution on Wall Street on Thursday, with investors taking a wait-and-see approach in a market that has become extended after weeks of gains.
Leaders from major Greek parties agreed on reforms and austerity measures needed in exchange for a new bailout package to avoid a chaotic default.
There is still a fair amount of skepticism that these agreements won't amount to action, given the history, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. The market's taking a wait-and-see approach.
Euro zone officials say the full package must be agreed with Greece and approved by the EU, IMF and European Central Bank by February 15, so legal paperwork can be completed in time to avoid a chaotic default that could threaten the global economic recovery.
Banks <.GSPF> were among the weakest sectors in the S&P 500, slipping 0.3 percent. JP Morgan Chase <.JPM> fell 0.5 percent to $38.10.
Actvitiy was subdued in the major stock indexes. The Dow Jones industrial average <.DJI> slipped 3.86 points, or 0.03 percent, to 12,880.09. The Standard & Poor's 500 Index <.SPX> fell 1.12 points, or 0.08 percent, to 1,348.84. The Nasdaq Composite Index <.IXIC> gained 1.98 points, or 0.07 percent, to 2,917.84.
In a measure of how extended the market has become, well over 75 percent of S&P 500 stocks are trading above their 26-week moving average. Nearly six weeks of back-to-back gains have left the index up 7 percent this year.
Providing support to the market was a report showing jobless claims unexpectedly fell last week, underscoring a firming in the labor market. That followed Friday's report of a better-than-expected rise in the number of jobs created in January.
The Nasdaq was helped by Apple Inc
But Cisco Systems Inc
The European Central Bank held interest rates at a record low on Thursday, seeing tentative signs of economic stabilization but refused to say what part it might play in averting a ruinous Greek default.
Diamond Foods Inc
(Reporting By Edward Krudy; editing by Kenneth Barry)