Wall Street breathes sigh of relief after Greece passes reforms

Europe Sun Monday 13th February, 2012

U.S. stocks rose on Monday in a confident start to the week after it appeared a final resolution to the Greek debt crisis was at hand.

For weeks Greek legislators, government officials and trade unions have been at loggerheads with the European Union and International Monetary Fund, which were demanding the debt-laden country implement strict austerity measures to combat its mounting debt and deficits problems. National strikes and revolts have weighed on the resolve of lawmakers to agree to the measures. However on Sunday Greece's Hellenic Parliament enacted the reforms into law.

Some in the eurozone however remain skeptical the measures will be implemented with any vigour. Nonethtless it was enough for Wall Street traders to wade into banking and financial stocks to provide a solid underpinning to the indices which rose in unison.

Without the measures Greece would not have secured a revised bailout package from the EU and the IMF, and it would have had to default on its government debt. The resolution to the crisis has taken the pressure off Europe which has been grappling with a sovereign debt crisis for the past year - at least for now.

"That the deal was approved really reduces a lot of the tension over the euro zone. But it was expected, and on a short-term basis, we're very done to the upside," Yu-Dee Chang, chief trader of ACE Investments in McLean, Virginia told the Reuters Thomson newsagency.

"That's why we went up and then backed off this morning. I'm cautious because there could be a short-term correction."

At the close of trading Monday the Dow Jones Industrial Average was up 72.81 points or 0.57% at 12,874.04.

The Nasdaq Composite was ahead 27.51 points or 0.95% at 2,931.39.

The Standard and Poor's 500 was up 9.13 points or 0.68% at 1,351.77.

The euro was stronger on foreign exchange markets taking other currencies with it.

Around the New York close Monday the euro had cruised to 1.3195.

The Japanese yen was higher at 77.57, while sterling firmed to 1.5768.

The Swiss franc edged up to 0.9162. The Australian dollar strengthened to 1.0737. The Canadian dollar rallied back above parity to 0.9994. The New Zealand dollar regained its recent strength to 0.8344.