On Wall Street: Dow index hits 13,000 (Getty Images) |
Wall Street’s bulls have reason to celebrate: The Dow Jones industrial average has crossed the 13,000 mark for the first time since the financial crisis after European leaders reached a new deal to prop up the Greek economy.
The Dow first crossed 13,000 in May 2008, but was battered down soon after when the mortgage bubble burst.
The blue chip index's latest surge has been driven by a stream of evidence signaling that the U.S. economy is on the mend. The Dow has risen 20% since hitting a recent low of 10,655.30 on Oct. 3.
The milestone reached Tuesday came after European leaders agreed to give Greece a $170-billion aid package in exchange for sweeping new cuts to the Greek budget. The deal is designed to give Greece continued access to the international bond market, but there are still big questions about how it will be carried out.Investors have struggled to digest the import of the deal. The Dow wobbled Tuesday morning, entering negative territory in early trading before reversing course. Even after crossing 13,000 the index fell again, and was recently trading up 0.4% or 46.81 points to 12,996.68. Twenty of the index’s 30 stocks were trading in positive territory.
European markets rose on Monday in anticipation of the deal and fell off slightly on Tuesday. The leading stock market index in Germany was recently down 0.5% after rising 1.5% Monday.
U.S. markets were closed Monday for Presidents Day. The Standard & Poor’s 500 index notched its own milestone Tuesday morning by rising above its highest closing point since 2008. The index was recently up 0.4% or 5.18 points to 1,366.41.
The technology-heavy Nasdaq composite rose 0.4%, or 10.40 points to 2,962.18.
The Russell 2000 index of smaller companies was up 0.2% or 1.65 points to 830.33. The index has climbed more than 35% since early October and is within striking distance of an all-time high hit last year.
The European financial situation has bedeviled stock markets for the last two year, as political leaders have struggled to come up with a comprehensive answer to the hobbling levels of debt in Greece and other struggling European economies.
The situation has quieted down in recent months, allowing the stock market's steady surge upward, and the deal struck early Tuesday appears aimed at ending the crisis once and for all. But economists and politicians left the meetings with a number of unanswered questions.
The deal still has to be approved by the parliaments of individual European countries. And the Greek economy is also in dire enough shape that it may need yet another bailout.
"Although an agreement has been reached we suspect this is not the last we'll hear of Greece over the days, weeks, months and years," Deutsche Bank economist Jim Reid wrote in a note to clients.
The stock market’s recent climb has caught many investors off guard, especially since many of last year’s problems are lingering. In addition to the continuing concerns about Europe’s debt crisis, there is fear that corporate earnings and the overall U.S. economy may still weaken.
ALSO:
AFL-CIO leader goes on the offensive
L.A. for less than the price of sunblock. 
