US open: Wall Street gains on Greek hopes
The main US equity benchmarks were holding near their best levels of the session, supported by another rally in Chinese equities and a strong session in Europe, amid growing hopes that Greece will finally be able to strike a deal with its creditors.
“Greece edging closer to a bailout deal with its lenders and a continuation of China’s stock market rebound is setting up US markets for a big move higher on Friday’s open,” said Jasper Lawler, market analyst at CMC Markets.
Against this backdrop, the Dow Jones Industrial Average was 204 points higher to 17,52, while the S&P 500 was trading up by 68 points and the Nasdaq Composite by another 69 points.
Optimism grows over a Greek debt deal
European stocks racked up solid gains and Southern European debt rallied as investors welcomed news that Greece has submitted fresh proposals to its Eurozone creditors. Meanwhile, German Bund yields rose as the risk-on tone prompted investors to sell the safe-haven asset.
Greece has requested €53.5bn to help cover its debts until 2018 and has agreed to implement tax hikes and spending cuts in return. The Greek parliament will vote later on Friday on whether to endorse the new set of proposals put forward to creditors.
Eurogroup head Jeroen Dijsselbloem said that a decision on Greece’s new reform proposals will be made “probably today”, according to Bloomberg.
EU leaders are due to meet with Greece on Sunday to go over the plans, which French President Hollande has called "serious and credible". However, media reports on Friday suggested that the summit of European Union heads will be cancelled if Greece and its creditors manage to reach a deal by Saturday.
With Greece seemingly a step closer to striking a deal with its creditors, the dollar fell against its major rivals.
Gold futures for August delivery were up 0.07% at $1,160.00, while oil pushed slipped, with West Texas Intermediate futures off by 0.09%, at $52.72.
US Fed’s rate hike cycle will likely start this year
The first increase in the US central bank’s main policy rate is likely to come later in 2015, the chair of the Federal Reserve said.
Speaking at The City Club of Cleveland Janet Yellen said: "I expect that it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy."
Apple rises
In corporate news, Gap nudged higher in pre-market trading after it said late on Thursday that June same-store sales were down 1%, compared with a 2% fall last year.
Apple gained 2.4%, rebounding following five straight days of losses.
Alibaba was in focus on Friday following press reports that the company’s executive director has been detained by Chinese authorities over corruption allegations.