US stocks edge higher despite delayed Greek aid

US stocks have caught a break from its mid-year slump on Monday.

The S&P 500 Index is up 7.70 points, or 0.61 percent, to trade at 1,279.20 at 11:54 a.m. ET. The Dow Jones Industrial Average climbed 87.68 points, or 0.73 percent, to trade at 12,092.04. The Nasdaq Composite rallied 0.47 percent.

The US stock market rally on Monday morning is likely due to bargain hunting or a technical bounce because markets rarely fall straight down or climb straight up.

Currently, the market has been in a downtrend since May because of a series of bearish news.

The latest bearish development is the delaying of aid for Greece. Euro zone finance ministers struck a harsh stance and demanded tougher austerity measures from Greece before they would make a definitive decision to release the next tranche of EU/IMF loans.

The tension highlights two problems.

One danger is that populist opposition would block the Greek government’s attempts to cut spending. On the other hand, the fragility of the Greek government’s funding ability risks sparking a European banking crisis because of the Greek debt European banks hold.

More than the Greek debt crisis, US stocks have performed poorly because of a soft patch in the US economy. Economists aren’t quite sure of the cause; theories include the ending of QE2 and the fading of US fiscal stimulus.