U.S. stocks traded sharply higher Monday, with the Dow Jones Industrial Average soaring more than 100 points, as investors were cautiously optimistic Greece and its European creditors will reach a bailout deal this week, easing fears Athens will default on its debt and exit the eurozone. The Nasdaq composite hit a new intraday high of 5,162.13, driven by gains in biotechnology.
The Dow (INDEXDJX:.DJI) jumped 112.94 points, or 0.63 percent, to 18,128.89. The Standard & Poor’s 500 index (INDEXNASDAQ:.IXIC) added 14.13 points, or 0.67 percent, to 2,124.12. The Nasdaq composite (INDEXSP:.INX) gained 33.73 points, or 0.66 percent, to 5,150.73.
All 10 sectors in the S&P 500 traded higher, led by gains in the financial and healthcare sectors.
Dow component Merck & Co. Inc. (NYSE:MRK) led the index higher Monday, adding 1.6 percent. JPMorgan Chase & Co. (NYSE:JPM), Goldman Sachs Group Inc. (NYSE:GS) and American Express Company (NYSE:AXP) each gained more than 1 percent.
Global stock markets soared in the U.S., Europe and Asia Monday as Greece submitted reform proposals to eurozone finance ministers, just days after Athens and its creditors failed to secure a deal that would prevent the country from going bankrupt.
"We will work very hard in the next few days, the institutions with the Greek government, to get that deal this week," Jeroen Dijsselbloem, the head of the Eurogroup of eurozone finance ministers, said Monday at a news conference in Brussels.
The emergency summit this week could be one of the last chances for Greece to reach a deal before the government must repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund on June 30.
However, experts warn even if Athens and its creditors hammer out some sort of agreement this week, the debt relief agreed to as part of the deal may not be big enough to put a sizable dent in Greece’s debt.
“Some sort of deal may finally be on the way, but it is unlikely to bring the Greek crisis to a decisive end,” Jonathan Loynes, chief European economist at Capital Economics, said in a research note Monday.
The current government is seeking to restructure the country's massive debt burden, which stands at nearly 177 percent of annual GDP, more than any of the 19 nations using the euro. A debt write-off of as much as 50 percent is needed to bring the debt-to-GDP ratio back down to a sustainable level, Loynes says.
Data released Monday showed U.S. home resales surged in May to the highest level since November 2009, signaling the recent rise in mortgage rates pushed buyers to purchase homes before rates increase further. Existing home sales jumped 5.1 percent last month to an annual rate of 5.35 million units, the National Association of Realtors said Monday.
Economists are looking ahead to Wednesday's third and final revision to the Commerce Department’s U.S. gross domestic product data for the first quarter, which is the broadest measure of goods and services produced across the economy. The U.S. economy shrank in the first three months of the year, caused in part by a slowdown in shipping due to West Coast port disputes.
Economists forecast the U.S. economy contracted at a seasonally adjusted annual rate of 0.2 percent in the first quarter, compared with the Commerce Department’s second estimate of 0.8 percent contraction in May.
Here's the economic calendar for the week of June 22. All listed times are EDT.
- 8:30 a.m. -- Chicago Fed national activity index (May)
- 10 a.m. -- Existing home sales (May)
- 8:30 a.m. -- Durable goods orders (May)
- 9 a.m. -- FHFA home prices (April)
- 9:45 a.m. -- Markit PMI flash (June)
- 10 a.m. -- New home sales (May)
- 8:30 a.m. – U.S. gross domestic product (Q1)
- 8:30 a.m. -- Weekly jobless claims
- 8:30 a.m. -- Consumer spending (May)
- 10 a.m. -- Consumer sentiment (June)