NEW YORK (Reuters) - The Greek parliament’s approval of a third bailout program for the debt-stricken country boosted world stock markets, with Wall Street also buoyed by robust corporate earnings, while the U.S. dollar rose on expectations of higher interest rates.
Strong quarterly reports from Netflix (NFLX.O) and eBay (EBAY.O) helped push the Nasdaq to a record closing high, while European markets cheered news that the European Central Bank was pressing ahead with its economic stimulus program, had agreed to more funding for Greek banks, and promised further action if needed.
European shares hit a more than six-week high after the parliament in Athens approved austerity measures demanded by its lenders to open talks on the new bailout.
While the political climate in Greece remained fragile, investors were willing to give a cautious thumbs-up to the Greek parliament’s approval of the bailout plan.
“The parliamentary approval boosted prices today,” said Clem Miller, portfolio manager at Wilmington International Funds in Baltimore, Maryland. “There was optimism about the European Central Bank providing more liquidity to Greece, but there is significant ongoing caution about Greek implementation risk.”
MSCI’s all-country world equity index .MIWD00000PUS, which tracks shares in 45 nations, was last up 0.69 percent at 431.97.
On Wall Street, the Dow Jones industrial average .DJI closed up 0.39 percent at 18,120.25. The S&P 500 closed up 0.80 percent at 2,124.29, near a record high. The Nasdaq Composite .IXIC closed up 1.26 percent at 5,163.184.
The FTSEurofirst 300 index .FTEU3 of top regional shares closed up 1.4 percent at 1,608.71, near a more than six-week high of 1,613.61 hit earlier.
The dollar index .DXY, which measures the greenback against a basket of six major currencies, rallied to a more than seven-week high of 97.756 on expectations that the Fed will hike rates this year. Fed Chair Janet Yellen said on Thursday that an interest rate hike is likely this year, repeating comments from Wednesday made as part of her semi-annual testimony to Congress.
The euro hit $1.08550 EUR=EBS, a more than seven-week low against the dollar. Short-dated Treasuries prices slipped on the favorable interest rate outlook, with three-year notes US3YT=RR last down 3/32 in price to yield 1.04 percent, from a yield of 1 percent late Wednesday. Yields move inversely to prices.
“People are realizing what (Yellen) said, that every meeting is on the table going forward, and thinking maybe we shouldn’t be long the front-end,” said Charles Comiskey, head of Treasuries trading at Bank of Nova Scotia in New York.
Brent crude oil prices rose after a power outage closed the UK’s largest oilfield and as the August contract approached expiration.
Brent crude for August LCOc1 settled up 46 cents at $57.51 a barrel. U.S. light crude CLc1 settled down 50 cents at $50.91.
Spot gold prices XAU= hit an eight-month low of $1,142.10 on the expectations for a 2015 Fed rate hike. U.S. gold futures GCv1 for August delivery settled down 0.3 percent at $1,143.90 an ounce.
Additional reporting by Jamie McGeever in London and Karen Brettell in New York and Tanya Agrawal in Bengaluru; Editing by Nick Zieminski, Bernadette Baum, Chizu Nomiyama