NEW YORK (Reuters) - Stock markets rallied around the world on Tuesday while the U.S. dollar fell after the new Greek government dropped calls for a write-down of its foreign debt, easing concerns about growing instability in the euro zone.
Gold, which is viewed as a safe-haven investment, fell on the day while copper had its biggest one-day jump since May 2013. Oil prices also continued their recent rebound, up for a fourth straight positive day.
The Greek government, led by the left-wing Syriza party that won elections just over a week ago, on Monday ditched its stance of calling for a reduction of foreign debt and proposed ending a standoff with its creditors by swapping the debt for new growth-linked bonds.
“The market is beginning to see signs of some stability coming into oil and the Greek situation seems to be tilting toward the side of what the market is looking for, which is a retreat from its call for a debt writedown,” said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.
The MSCI International ACWI Price Index .MIWD00000PUS rose 1.4 percent, while the pan-European FTSEurofirst 300 index .FTEU3 ended 0.8 percent higher. The Greek banking index .FTATBNK soared 18 percent and Greek bond yields fell sharply.
The Dow Jones industrial average .DJI rose 305.36 points, or 1.76 percent, to 17,666.4, the S&P 500 .SPX gained 29.18 points, or 1.44 percent, to 2,050.03 and the Nasdaq Composite .IXIC added 51.05 points, or 1.09 percent, to 4,727.74.
Gains in U.S. markets were broad, with all 10 primary S&P 500 sectors up on the day.
The benchmark 10-year U.S. Treasury note US10YT=RR was down 1 point, the yield at 1.7813 percent.
The U.S. dollar index .DXY fell 1 percent against a basket of currencies, while the euro EUR= was up 1.3 percent. The yen JPY= rose 0.1 percent against the dollar.
U.S. crude oil futures CLc1 jumped 5.6 percent, to $52.35 per barrel. Over the past four sessions oil is up about 21 percent, the best four-day run for the commodity since January 2009. Brent crude LCOc1 added 5 percent to $57.52, boosted by the decline in the dollar as well as encouraging U.S. manufacturing data.
Despite the day’s rise, oil is still down more than 40 percent from highs reached in June. U.S. shares of BP Plc BP.N rose 3.1 percent to $41.10 after the company announced a 13 percent reduction in capital expenditure for 2015, adding to cuts in investment in the sector.
Gold XAU= prices fell 1 percent on the day while silver XAG= rose 0.3 percent.
Earlier, Asian shares sagged on growth concerns. MSCI’s broadest index of Asia-Pacific shares, excluding Japan .MIAPJ0000PUS, dipped 0.2 percent after weak U.S. data added to concerns about the state of the global economy. Japan’s Nikkei .N225 closed down 1.3 percent.
Editing by James Dalgleish and Dan Grebler