TORONTO – United states markets closed solidly higher, using the Nasdaq hitting a new all-time high, amid renewed optimism in Europe that Greece will reach a deal with its creditors and steer clear of a default.
The S&P/TSX composite index gained 137.36 suggests 14,790.48, with almost all sectors closing higher, as the loonie was down 0.40 of the U.S. cent at 81.13 cents.
In New York, the Dow Jones industrial average rose 103.83 points to 18,119.78 and also the S&P 500 climbed 12.86 points to 2,122.85.
The Nasdaq shot up 36.97 suggests close at a record 5,153.97.
Sadiq Adatia, chief investment officer at Sun Life Global Investment, says global markets were buoyed by news that European officials are hopeful that a deal on the financial bailout for Greece is at reach this week.
\”Everybody\’s been watching the Greece situation quite carefully, and it was looking kind of dim a week ago,\” Adatia said.
However, news that Greece has softened its stance and is willing to negotiate and move closer towards what the European Central Bank and the International Monetary Fund are asking for is a positive sign, Adatia said.
\”I think that alone was what\’s giving the markets a nice lift today,\” he explained.
With leaders in the 19 European countries that use the euro gathering in Brussels, financial officials gave a tentative endorsement to new Greek proposals for spending cuts and reforms in exchange for billions of euros in fresh loans.
Greece\’s economy minister, Giorgios Stathakis, said his country\’s latest offer effectively breaks the deadlock with international lenders.
The proposals include new taxes on business and the wealthy but no further cuts in pensions or public sector salaries, still a \”red line\” for Greece, he explained.
However, Athens will make tougher rules on early retirement and shift some types of goods to a higher florida sales tax bracket, including hotels and particular foods. Emergency bailout taxes that had been imposed will remain, even though Tsipras had pledged to phase them out.
The current talks focus on releasing the last 7.2 billion euros in the country\’s bailout program, which expires after the month.
Without those funds, Athens is likely to default on a big payment owed June 30 towards the International Monetary Fund, something which could lead to an exit from the euro currency and possibly the European Union too.
Despite the rally, Adatia cautions there\’s still a long way to go before Greece is out of the woods.
\”Even if everything gets resolved, it isn\’t certain that Greece can get the money in time to avoid a default on their own loans,\” he explained.
On the commodity markets, the August crude contract gained 41 cents to US$60.38 a barrel, while August gold fell $17.80 to US$1,184.10 an oz.
In U.S. economic news, sales of existing homes rose in May, recovering from a decline in April.
With files in the Associated Press