Stocks rise after European leaders agree to Greece aid package; consumer sentiment improves

Stocks rise after Greece gets aid package

NEW YORK — Stocks are rising after European leaders agreed to a bailout program for debt-burdened Greece.

Investors welcomed a joint European Union and International Monetary Fund aid program that will help Greece and other European nations facing rising debt.

A report Friday showing a small improvement in consumer sentiment is also helping stocks. The better-than-expected report further solidifies expectations that consumers are growing more comfortable about the economy.

The Dow Jones industrial average is up 57.06, or 0.5 percent, at 10,898.27. The Standard & Poor’s 500 index is up 6.42, or 0.6 percent, at 1,172.15, while the Nasdaq composite index is up 10.43, or 0.4 percent, at 2,407.84.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Stocks rose Friday after European leaders agreed to a bailout program for debt-burdened Greece.

A report showing a small improvement in consumer sentiment also helped stocks. The better-than-expected report further solidified expectations that consumers are growing more comfortable about the economy.

At the same time, traders brushed off a slightly worse-than-expected revision to the nation’s fourth-quarter gross domestic product. The report confirmed that the economy still grew rapidly during the last three months of the year because of government stimulus measures and companies replenishing their inventories.

U.S. investors welcomed a joint European Union and International Monetary Fund aid program that will help Greece and other European nations facing rising debt. Stocks pulled back from morning highs on Thursday as concern grew that meetings between European leaders would not result in a rescue program.

The deal reached late Thursday will not make money immediately available to Greece, but instead act more as a safety net. Greece or other countries that use the euro will be able to receive money if they cannot raise it on their own.

Heavy debt loads in Greece and other European countries had been one of the few drags on an otherwise rising stock market in recent months. Investors have been concerned that mounting debt problems in places like Greece, Portugal and Spain would spread to other countries and upend a nascent global economic recovery.

The reassurance that Greece will get aid, if necessary, helped the euro rise against the dollar, bouncing off 10-month lows seen earlier this week. Materials stocks, like Alcoa Inc. and United State Steel Corp., got a boost because of the weaker dollar.

Financial shares also rose on receding European debt worries.

In morning trading, the Dow Jones industrial average rose 54.27, or 0.5 percent, to 10,895.48. The Standard & Poor’s 500 index rose 6.43, or 0.6 percent, to 1,172.16, while the Nasdaq composite index rose 10.29, or 0.4 percent, to 2,407.70.

About five stocks rose for every two that fell on the New York Stock Exchange, where volume came to 224.1 million shares, compared with 257.9 million traded at the same point Thursday.

Investors appear to be brushing off a final update to GDP that showed the U.S. economy grew at a 5.6 percent pace in the fourth quarter. Economists polled by Thomson Reuters, on average, forecast the growth rate would remain unchanged from a previous estimate of 5.9 percent.

The rapid pace of growth has likely slowed in the first quarter as a surge in manufacturing and government-supported programs eased. At the same time, consumer spending has not ramped up fast enough to offset the slowdowns elsewhere.

The strength of the consumer remains a key factor in how strong a recovery will be throughout the rest of the year.

The Reuters/University of Michigan consumer sentiment index for March was revised to 73.6 from a previous estimate of 72.5. The revised number was better than the 73 reading economists had forecast and even with February’s figure.

Daniel Egan, president of the Massachusetts Credit Union League, said sentiment is likely to remain stuck in its current range until there are signs of jobs growth.

Consumers are “frozen” right now because they are still unsure about their jobs, Egan said. The updated GDP report showed consumer spending was even slower at the end of 2009 than previously estimated.

High unemployment has kept consumers wary, which has been reflected in mixed consumer confidence surveys in recent months. The Labor Department releases its monthly employment report next week. It is expected to show employers added jobs in March for only the second month since the recession began in late 2007.

In corporate news, Apple Inc. hit a new high for the year after an analyst raised his price target on the stock to $300. Shares rose $4.79, or 2.1 percent, to $231.44.

Oracle Corp. shares dipped 44 cents to $25.60 a day after the technology company said its profit in the quarter ended Feb. 28 fell 11 percent.

Alcoa shares rose 23 cents to $14.34, while U.S. Steel jumped $1.93, or 3.1 percent, to $64.30. Dow Chemical Co. jumped 52 cents to $30.40.

Stocks have been grinding higher in recent weeks as new economic reports show signs of improvement in the economy, although that growth remains slow. The Dow has risen in 16 of the past 20 trading sessions.

Bond prices were little changed. Weak demand at the government’s latest auctions for Treasury notes has sent prices tumbling and interest rates sharply higher earlier this week.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.88 percent from 3.89 percent late Thursday. The 10-year note is often used as a benchmark for interest rates on consumer loans.

The Russell 2000 index of smaller companies rose 5.24, or 0.8 percent, to 684.34.

Overseas, Britain’s FTSE 100 fell 0.4 percent, Germany’s DAX index dropped 0.1 percent, and France’s CAC-40 fell 0.1 percent. Japan’s Nikkei stock average rose 1.6 percent.