Dow Tops 10,000 on Greece Rescue Hopes

(AP)  The Dow Jones industrial average jumped back above 10,000 on hope that the European Union will help Greece manage its growing debt burden.

The Dow rose 150 points Tuesday, a day after closing below 10,000 for the first time in three months. The major indexes all gained more than 1 percent.

Global markets bounced back on reports that European Central Bank President Jean-Claude Trichet is changing his travel schedule to attend a meeting of EU officials on Thursday and that plans are being developed to rescue Greece. The reports are raising hopes that policymakers will take bigger steps to contain troubles in Greece. The county is struggling with big budget gaps and is seeing demand fall for its debt.

Though Greece's economy is small, investors are concerned that troubles there will spill into other countries. World stock markets have been tumbling in recent weeks on concerns that debt problems would spread. Investors are also concerned by budget gaps in Ireland, Portugal, Spain and the uncertainty has undermined Europe's common currency, the euro.

The European debt problems are the latest obstacle for investors who have put the market's 10-month rally on hold. Stocks began retreating in mid-January after China said it would try to control its economy to avoid speculative bubbles. Things got worse when President Barack Obama announced plans to curb trading by large financial institutions.

On Tuesday, Greece took its latest steps to calm markets, pledging to increase retirement ages, raise fuel taxes and accelerate reforms. However a strike over the government's new austerity measures is still expected to proceed on Wednesday.

"There's some euphoria that maybe it's not going to be blowing up," said Erik Davidson, managing director of investments for Wells Fargo Private Bank in Carmel, Calif., referring to easing fears over Greece.

The Dow also got a boost from Morgan Stanley's upgrade to shares of Caterpillar Inc. It was Morgan's first upbeat take on the stock in three years. A cautious forecast from the equipment maker hurt stocks late last month.

According to preliminary calculations, the Dow rose 150.25, or 1.5 percent, to 10,058.64, its steepest percentage gain since Nov. 9. The broader Standard & Poor's 500 index rose 13.78, or 1.3 percent, to 1,070.52, while the Nasdaq composite index rose 24.82, or 1.2 percent, to 2,150.87.

(CBS)

Stocks have become more volatile in recent weeks as concerns grow about the strength and sustainability of a global economic recovery. The Dow, which fell almost 104 points Monday (see chart at left), has posted triple-digit moves in 11 of the last 17 trading days. The index has posted four consecutive Dow market has retreated 6.2 percent since hitting a 15-month high in the middle of January.

The market's leap higher illustrates how reliant investors around the world are on soothing words from policymakers. In the U.S., stocks have barreled higher for nearly a year because the Federal Reserve has pledged to hold interest rates low to help revive the economy. The flow of cheap cash has perhaps been the biggest driver of the market as investors look for places to stick their money.

Analysts are asking how markets will fare as the Fed dismantles some of its emergency support programs for the economy, as it has started to do. There are concerns, for example, that home loan rates will rise will rise as the Fed ends a program to purchase mortgage debt to drive up demand.

"It's sort of like last call at the bar," Davidson said. "People have to start to look what the world is going to look like without being awash in liquidity."

The dollar fell against the euro, while gold rose.

Crude oil rose $1.86 to settle at $73.75 per barrel on the New York Mercantile Exchange. Heating oil prices jumped as a snow storm expected to bring heavy snow moved toward the East Coast.

Stephen A. Lieber, chief investment officer at Alpine Woods Capital Investors LLC in Purchase, N.Y., said the market's response to reports that other EU countries will throw Greece a life preserver illustrate that investors are hungry for reassurances from policymakers.

"People are scared that the entire delicate reconstruction of the system, which has been going on for two years, might be shattered," he said. "If the leaders are riding to the rescue then the market will feel renewed confidence."

Caterpillar was the biggest gainer among the 30 stocks that make up the Dow. The stock rose $2.75, or 5.4 percent, to $53.53.

Coca-Cola Co. reported fourth-quarter profit that matched analysts expectations. Its revenue topped forecasts as sales rose globally. Coca-Cola rose $1.36, or 2.6 percent, to $54.01.

More than three stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.2 billion shares compared with 1.1 billion Monday.

The Russell 2000 index of smaller companies rose 8.68, or 1.5 percent, to 595.17.

Overseas, Britain's FTSE 100 rose 0.4 percent, Germany's DAX index and France's CAC-40 each rose 0.2 percent. Japan's Nikkei stock average fell 0.2 percent.

[BSChemistry]

Greece and Spain won't pay back. This was a calculated Risk, and a Lesson for the Banking System. What is happening in Greece, is a very well orchestrated show, to get granted ?110bn aid, to avert meltdown. A new deception compared with the old Trojan Horse. The only thing Germans can do is:
REPOSSESS 170 Leopard 2AEX Battle Tanks from Greece, and 190 Leopard 2A6E Battle Tanks from Spain.
U.S.A must REPOSSESS 170 F-16 Jet Fighters from Greece, ? the rest is gone with the wind ?forever ?
Greece must stop paying lucrative pensions with borrowed money, reform the free health care system, and cut down, 4 times the military budged.
Greece?s problem is too much debt. Greece has a budget deficit of 12.7% of GDP ? meaning that the country is spending 12.7% more than the value of one year?s economic output.
Greece is no different to a serial credit card borrower who can?t pay back his loans. But just like a serial credit card borrower, as long as Greece keeps relying on borrowed money to fund itself, the problem won?t go away. It will just get worse.
http://www.defenseindustrydaily.com/Greece-in-Default-on-U-214-Submarine-Order-05801/
But don't worry; the ECB, the Fed or both will print the money.
And all of us will share the pain, with our hard-earned money.
Bad is never good until worse happens.

[TryTakingMyMoney]

Excuse me...Wallstreet is up due to Obama's polls drastically dropping. Liberal media continues to hide the real truth.

[rightbehind]

You must be a Icarus investor. Just how's those wings of wax working for you? Believing in the lie! Wealth that disappears like a fart in the wind. Moving mine to credit unions very soon!

[wheresmycountry]

Right. The tiny liberal minority that took over the presidency, the house, and the senate is completely insignificant, and Obama's abyssmal 57% approval rating that is better than Bush had for 6 of his 8 years in office is an invention of the liberal media, which is insignificant because EVERYBODY watches FOX News now.

[rightbehind]

The globalist at work. Why should wallstreet be worried about Greece and US stockholders suffer? They need to board up wallstreet and shut the door on every business that left the US.

[spaceatoms]

So I am suppose to support a Greek bailout, again the bailout was the worst idea in the history of economics, it was a bailout for the wealthy only. Whats next, a bailout for the antarctic fishing commission get a bailout that stimulates the economy for 10 years, please, the only ones getting the money are the lawyers!

[wfw3536]

The way the Obama administration wants to spend 40% more than we have or one and one-half trillion we will end up in the same situation. And his plan for the next 10 years is trillions and trillions of dollars worth of red ink. We will soon see our AAA rating go down the drain. It is too bad that the only solution Obama has is to spend more and more.

[Jim1900]

rightbehind - That is my concern too, except that the U.S. got into this mess first, and has maybe learned its lessons the hard way first too. It is amazing what the so-called regulators allowed, or even that they were allowed to draw paychecks from the U.S. government at all for what they did. But of course it all starts with the public who demands low interest loans to all people regardless of credit risk, and then wants nobody hurt (least of all themselves) in the resulting crash.

You can't defy the laws of physics, but each generation (or every other one at least) has to learn that for themselves.

[rightbehind]

But of course it all starts with the public who demands low interest loans to all people regardless of credit risk, and then wants nobody hurt (least of all themselves) in the resulting crash.

Look up the word "hedge fund". The bankers knew which loans were bad and bought "hedge funds" basically insurance policies against them betting they fail. Especially since they controlled conditions. Be like you buying insurance on your neighbors house knowing full well you plan to burn it down and you would never be held accountable. It was all economic engineering.

[rightbehind]

They've learned that no regulations like the Glass Steagall Act will be put back in the books. It means they can continue to loot the entire nation. Watch the magic show! See wealth Vanish like a fart in the wind. Step right up and have the speculative rug yanked right out from under you! Come one come all to the Greatest Ponzi Scam on Earth.