United States Stocks Are Surging

United States of America and European stocks rallied amid optimism Greece will reach a deal with creditors and as energy shares jumped with the price of crude. Government bonds fell, while the yen rose against all its major peers.

The Standard & Poor’s 500 Index climbed 1.3 percent at 12:30 p.m. in New York, the best gain in a month. The Stoxx Europe 600 Index surged 1.8 percent for its first rise in seven days. Germany’s 10-year bund yield topped 1 percent for the first time since September and Treasury 10-year rates hit October highs. Oil added 1.3 percent in New York.

Germany may be satisfied with Greece committing to at least one economic reform sought by creditors to open the door to bailout funds, according to two people familiar with the country’s position. Greece’s prime minister prepared to meet the leaders of the euro area’s biggest economies as he works to avert a default. Government bonds in Europe slumped on a combination of new supply and a brightening economic outlook.

“The Germans have officially blinked and off we go,” Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York, said by phone. “U.S. data has been better in general but more people are coming around to the fact the Fed is seeing all this volatility in the bond market and is afraid to raise rates, there isn’t too much tumult, oil has stabilized and so we move on.”

Optimism the monthslong standoff will reach a favorable resolution came as the European Central Bank raised the level of emergency cash available to Greek banks by 2.3 billion euros ($2.6 billion), people familiar with the decision said.
Broad Rebound

The S&P 500 fell on Monday to a two-month low before edging higher yesterday. The index had tumbled 2.4 percent from its May record amid concern the Federal Reserve will raise interest rates as early as September. The gauge this year is trading in the smallest range since at least 1995, with the 2015 low only 6.5 percent below its year-to-date high.

The rebound on Wednesday was broad, with all 30 members of the Dow Jones Industrial Average advancing and each of the 10 main S&P 500 groups rising. Energy shares in the larger index 1.1 percent, while technology shares surged 1.7 percent.

The Stoxx 600 rose 1.4 percent after hitting the lowest since February on Tuesday. Energy and commodity producers posted the biggest gains, while technology companies fell.

Greece’s ASE Index ended 1.1 percent lower before the report on Germany’s stance.
Bonds, Yen

The yield on 10-year Treasury notes increased four basis points to 2.48 percent, while bonds tumbled across the euro area, with Portugal’s 10-year yield rising above 3 percent for the first time since Nov. 24. Italy’s 10-year yield rose four basis points to 2.33 percent.

Oil’s 28 percent rally since the end of January stoked inflation expectations and cut the appeal of fixed payments. West Texas Intermediate climbed to $61.40 a barrel, following Tuesday’s 3.4 percent jump. U.S. crude stockpiles fell a sixth week, the longest stretch of declines since August.

Japan’s currency strengthened after Bank of Japan Governor Haruhiko Kuroda said it was hard to see further losses. The yen reached 122.46 per dollar, the strongest since May 26, after it touched 125.86 on June 5, the weakest since June 2002.

“The yen is unlikely to weaken further in real effective terms if you think with common sense, given how far it has come,” Kuroda said in parliament Wednesday.

The MSCI Emerging Markets Index added 0.7 percent as benchmark gauges in India, Poland, Taiwan and Turkey gained more than 1 percent. The index is poised to halt its longest slump since 1990.

Gold futures headed for the biggest gain in four weeks. The metal for August delivery gained 0.9 percent to $1,188.30 an ounce in New York, headed for the biggest gain since May 13.

Copper rose for a fourth day, the longest streak in a month, before China industrial production data Thursday that’s forecast to show an improvement in activity. Nickel, aluminum and zinc also rose.
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