Stocks rally ebbs as Greek PM urges 'No' vote

Wed Jul 1, 2015 4:52pm EDT
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By Herbert Lash

NEW YORK (Reuters) - Stocks worldwide rose on Wednesday on signs a resolution of Greece's debt crisis appeared in hand, but U.S. stocks later dropped from earlier levels after the prime minister called on Greeks to reject a bailout deal with international creditors.

Prime Minister Alexis Tsipras urged citizens to vote "No" in a referendum on Sunday on the bailout, in a defiant address that dispelled speculation he was dialing back his combative stance.

A "No" vote would not be tantamount to a rejection of Europe or the euro, Tsipras said. Instead, it would step up pressure on creditors to give Greece what it considered an economically viable agreement.

Major European stock indexes earlier surged 2 percent or more, with Germany's DAX .GDAXI gaining more than 3 percent, after Tsipras told international creditors that Athens could accept the bailout offer if some conditions were changed. Later, he told Greeks that the country was being "blackmailed."

"People thought he was ready to throw in the towel; obviously that's not going to be the case," said Robbert van Batenberg, director of market strategy at Societe Generale in New York.

"One line of thinking says with a 'No' vote in hand Tsipras can tell creditors that, 'Look, the people don't want this. The people want to protect their pensions. You got to give me a better deal.'"

The pan-European FTSEurofirst 300 index .FTEU3 rose 1.6 percent to close at 1,533.89, while Germany's DAX gained 2.2 percent. MSCI's all-country equities world index .MIWD00000PUS rose 0.47 percent, after earlier gains of almost 1 percent. MSCI's emerging markets index .MSCIEF retreated, falling 0.26 percent.

Stocks on Wall Street fell from earlier highs. The Dow Jones industrial average .DJI closed up 138.4 points, or 0.79 percent, to 17,757.91. The S&P 500 .SPX gained 14.31 points, or 0.69 percent, to 2,077.42, and the Nasdaq Composite .IXIC added 26.26 points, or 0.53 percent, to 5,013.12.   Continued...

Traders work on the floor of the New York Stock Exchange, June 30, 2015. REUTERS/Lucas Jackson