Greece Bailout Extension Puts the Hammer on the Bears
Today's financial recap and tomorrow's financial outlook.
Markets were sluggish in the early going, with the S&P 500 drifting to a low of 2085.44, but gradually lifted into the afternoon as biotech and financial stocks lifted off the lows.
In the afternoon, news hit that the Eurogroup agreed to a four-month extension of Greece's bailout program.
That was short of the 6 months Greece had been requesting, but it nonetheless proved to be good enough for the bulls as the S&P 500 rallied to a record high of 2110.61 before setting to finish at 2110.30, up 0.6%.
Greece must still present a list of reforms on Monday for review by Eurogroup, which will decide if the proposal is a valid starting point. This begins the process for possible disbursement of funds from the EFSF program and SMP profits.
As an illustration of how much the market's mood changed, the VIX went from being up 6.5% to down 6.3% by day's end.
And safety-oriented assets like US Treasuries, gold, and silver sold off, while the Global X Greece 20 ETF (GREK) rose an impressive 10.1%.
The economic calendar was fairly light today.
The February Markit US Manufacturing PMI was 54.3 in February, beating the 53.6 consensus, prior 53.9.
The Baker Hughes US Rig Count for the week ending February 20 was 1,310, down 48 from last week.
In earnings news, Deere (DE) beat analysts' estimates but offered a disappointing full-year earnings forecast due to weak demand from farmers, low commodity prices, and the strong US dollar. However, the stock quickly recovered its early losses and finished 0.8% higher at $92.43.
Tomorrow's Financial Outlook
The market will be closely watching for news related to the Eurogroup's reception of Greece's proposed reforms.
On the data front, the Chicago Fed National Activity Index will be reported at 8:30 a.m. ET, followed by Existing Home Sales at 10:00 a.m., and the Dallas Fed Manufacturing report at 10:30.
Dish Network (DISH), Express Scripts (ESRX), and Tenet Healthcare (THC) will report earnings.
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