NEW YORK (Reuters) - Global stock markets rallied while the euro rose broadly on Friday on optimism that last-minute concessions by Greek Prime Minister Alexis Tsipras would clinch a deal with international creditors and save the country from bankruptcy.
The S&P 500 jumped 1.2 percent, while equities markets in Europe and China also ended sharply higher.
The euro jumped more than 2 percent against the yen and investors cut safe-haven holdings in U.S. Treasuries. Late in the session, the 30-year bond’s yield had notched its biggest two-day increase in two years.
The volatile week saw Greece’s banks remain shut after the country voted in a referendum to reject previous bailout terms, raising chances of a “Grexit” from the euro.
The new Greek plan is by no means a done deal. Greece’s parliament still needs to throw its weight behind the proposals and trust with creditors needs to be rebuilt. But investors saw the latest news as reason to be upbeat.
“Investors are betting that a Greek deal will be stuck by this Sunday, and that reduction of risk is boosting stocks today. The removal of the risk of an exogenous shock means better market psychology,” said Jim McDonald, who helps oversee $960 billion in assets as chief investment strategist at Northern Trust Asset Management in Chicago.
The Dow Jones industrial average rose 211.79 points, or 1.21 percent, to 17,760.41, the S&P 500 gained 25.31 points, or 1.23 percent, to 2,076.62 and the Nasdaq Composite added 75.30 points, or 1.53 percent, to 4,997.70.
Indexes finished off their highs of the session after Federal Reserve Chair Janet Yellen said she expected the Fed to raise interest rates at some point this year.
MSCI’s all-country equities world index jumped 1.5 percent, while European shares ended up 2.1 percent. The Bank of New York Mellon China’s index of Chinese shares traded in the United States rose 2.4 percent.
China stocks rose, buoyed by a raft of support measures from Beijing that appeared to calm investors. Panic selling had slashed a third of the value off mainland markets since its peak in June.
China’s worries have spread to other markets, with iron ore the hardest-hit industrial commodity and oil prices also hit this week.
Copper slipped and registered a weekly fall of nearly 3 percent as concerns persisted over China. Three-month copper on the London Metal Exchange ended down 0.8 percent at $5,590 a tonne.
Oil prices were nearly flat. Data showed the U.S. oil rig count barely rose this week, easing worries about new supply. U.S. crude fell 4 cents to settle at $52.74 per barrel, while Brent gained 12 cents to $58.73.
Gold prices pared earlier gains after Yellen’s comments. Spot gold was up 0.1 percent at $1,160.33 an ounce.
The euro climbed to a one-week high against the yen of 137.27 yen and was last at 136.84 yen, up 2.2 percent. The euro zone common currency posted its largest one-day gain since April 2013. Against the dollar, the euro was up 1.0 percent at $1.1145.
U.S. Treasuries prices fell week as a second-day recovery in Chinese stock prices and hopes of a Greece debt deal reduced the safe-haven allure of U.S. government debt.
The 30-year Treasury bond’s yield was up 10.9 basis points in late trading on Friday at 3.208 percent. This would bring its two-day increase to about 22 basis points, the largest such jump since early July 2013, according to Reuters data.
Additional reporting by Ryan Vlastelica in New York and Lionel Laurent in London; editing by Larry King, Frances Kerry and David Gregorio