Wall Street up on Greek deal, Dow hits 13,000

Tue Feb 21, 2012 1:23pm EST
 
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By Ryan Vlastelica

NEW YORK (Reuters) - Stocks rose on Tuesday, with the Dow briefly topping 13,000 for the first time since May 2008, after Greece secured a bailout to avoid default, but gains were limited as investors had priced in expectations of a deal.

Signs of improvement in the economy and stabilization of Europe's debt crisis have driven the Dow more than 20 percent higher since late last year, while the S&P has climbed more than 8 percent so far this year.

Euro zone finance ministers agreed on a 130 billion euro ($172 billion) rescue for Greece to avert an imminent chaotic default after forcing Athens to commit to unpopular cuts and private bondholders to take bigger losses.

"This is the most solid agreement Greece has had, with actual money behind it, and that makes the market optimistic," said Phil Flynn, senior market analyst at PFG Best in Chicago.

Even with the bailout, Greece faces a long road to economic recovery. European Union officials said the Greek economy will only return to growth in 2014 after a recession that will shrink output by 17 percent.

"If you say this is definitely the end of the story, then that shows you're not familiar with the history of the issue," Flynn said. "We're cautiously optimistic, but we're not likely to move significantly higher from this point since we've rallied going into it."

The Dow Jones industrial average .DJI was up 42.65 points, or 0.33 percent, at 12,992.52 after rising to 13,005. The Standard & Poor's 500 Index .SPX was up 4.88 points, or 0.36 percent, at 1,366.11. The Nasdaq Composite Index .IXIC was up 4.18 points, or 0.14 percent, at 2,955.96.

Wal-Mart Stores Inc (WMT.N: Quote) lost 4 percent to $60.01 and was the top drag on both the Dow and S&P after its quarterly profit came in short of expectations.   Continued...

 
Traders work on the floor of the New York Stock Exchange February 21, 2012. REUTERS/Brendan McDermid