Wall St extends gains for 3rd day on Greece vote

By @ibtimes on

Stocks rose on Wednesday after the Greek parliament approved austerity measures, clearing a major hurdle in the country's bid to win access to international funding to avoid default.

U.S. stocks slipped shortly after the vote but the gains returned solidly and the CBOE Volatility Index <.VIX>, Wall Street's fear gauge, fell 8.4 percent to 17.56.

Sometimes that's how the market works. They anticipate things and discount them, and when they actually occur, they sell on the news, said Eric Marshall, director of Research, Hodges Capital Management in Dallas, Texas.

But risk seems to be back in the market (after the Greek vote) after weeks of risk-off. That's helping the equities move higher.

The Dow Jones industrial average <.DJI> was up 67.70 points, or 0.56 percent, at 12,256.39. The Standard & Poor's 500 Index <.SPX> was up 10.07 points, or 0.78 percent, at 1,306.74. The Nasdaq Composite Index <.IXIC> was up 10.95 points, or 0.40 percent, at 2,740.26.

Financials led the market higher. Bank of America Corp rose 3.3 percent to $11.18 after it reached a settlement with mortgage bond investors. The $8.5 billion settlement removed a question mark hanging over the bank since October about potential financial damage.

The S&P financial sector index <.GSPF> was up 1.6 percent, one of the top gainers.

In other company news, BJ's Wholesale Club Inc added 4.6 percent to $50.29 after it agreed to a buyout by private equity firm Leonard Green & Partners and another group.

Monsanto Co advanced 4.5 percent to $69.89 after its quarterly profit topped estimates, while General Mills Inc edged 0.1 percent higher to $37.26 after the cereal maker forecast weaker fiscal-year earnings than Wall Street expected.

The Greek parliament approved a five-year package of spending cuts, tax rises and state asset sales by a comfortable margin. The vote was a key step toward securing international funds and preventing the euro zone's first sovereign default.

U.S. pending home sales rose a stronger-than-expected 8.2 percent in May, but a glut of unsold properties remained a drag on the housing market.

The improvement in home sales is encouraging, but this doesn't even begin to solve the structural issues in the sector, said Liam Dalton, president of Axiom Capital Management Inc in New York. Still, any sign of stability is a victory.

(Reporting by Angela Moon; Editing by Kenneth Barry)

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