European debt deal sends markets higherNEW YORK — What’s good for Europe is good for markets. News that European leaders were drawing up a new rescue plan for Greece and taking a broader approach to dealing with Europe’s debt troubles drove markets higher Thursday.
By: By Matthew Craft, The Associated Press, The Jamestown Sun
NEW YORK — What’s good for Europe is good for markets.
News that European leaders were drawing up a new rescue plan for Greece and taking a broader approach to dealing with Europe’s debt troubles drove markets higher Thursday.
The Dow rose 152 points. Oil crossed above $100 for the first time since June. The euro rose against the dollar, and U.S. government bonds fell.
At an emergency meeting in Brussels, European officials agreed to give Greece a rescue package worth 109 billion euros ($155 billion). They also plan to lower interest rates and lengthen payback terms for loans to Greece, as well as those made to Ireland and Portugal.
European officials gave new powers to the region’s bailout fund, allowing it to provide credit to struggling countries before a crisis flares up. German Chancellor Angela Merkel said European officials want to tackle the “root” of the debt crisis.
Worries about Europe’s debt crisis have been hanging over financial markets for months. A default by Greece or another deeply indebted country could freeze debt markets and cause other damage to Europe’s banking system.
The Dow Jones industrial average rose 152.50 points, or 1.2 percent, to close at 12,724.41.
The S&P 500 index rose 17.96 points, or 1.4 percent, to 1,343.80. The Nasdaq composite index rose 20.20 points, or 0.7 percent, to 2,834.43.
The yield on the 10-year Treasury jumped to 3.00 percent, up from 2.93 percent late Wednesday. The euro rose two cents to $1.44.
Europe’s debt crisis and the debate over raising the U.S. government’s borrowing limit have kept investors on edge over the past two weeks. The Dow and S&P have flip-flopped between gains and losses over the past eight trading days.