The Dow Jones industrial average ballooned 480 points over the last 4 days of the month.
By DAVID K. RANDALL and FRANCESCA LEVY | AP Business Writers
A protester shouts a slogan as she waves the Greek flag during a protest outside the Parliament in Athens, Thursday, June 30, 2011. Global stocks pushed higher once again on Thursday after Greece cleared the final hurdle required to get bailout cash needed to avert a potential debt default next month. (AP Photo/Thanassis Stavrakis)NEW YORK — Four days, 480 points.
That's how the Dow Jones industrial average closed the final four days of June. The Dow added more than 150 points on Thursday alone after Greece cleared the final hurdle needed to receive its next installment of emergency loans. A pickup in manufacturing around Chicago also pushed indexes higher.
The weeklong rally began Monday when Nike Inc. reported quarterly results that showed that consumers were spending more than expected. The stock market's gains put it on track for the best week since July of last year.
It was a stunning reversal from the beginning of the month, when the Dow dropped nearly 280 points in one day. The first day of June, reports showed that auto sales fell sharply in May and that private companies were hiring far fewer people than expected. The late surge was not enough to turn the broader stock market positive for the month, but it brought the Dow up 0.8 percent for the quarter. The Standard and Poor's 500 index and Nasdaq composite each lost about 0.3 percent for the month.
Thursday's gains came after Greek lawmakers passed a cost-cutting bill that had to be approved before international lenders would release $17 billion in rescue funds to Greece. The country needs the money to avoid defaulting on its debt. A default by Greece could disrupt financial markets and lead to a widespread European financial crisis.
Traders were also reassured by encouraging signals about the U.S. economy. A trade group reported that manufacturing in Chicago sped up unexpectedly in June. Analysts had forecast a decline. Earlier in the week, Nike Inc. reported earnings that were better than analysts had predicted. That led many investors to believe that high gas prices haven't stopped consumers from spending on non-necessities.
The Dow rose 152.92 points, or 1.3 percent, to 12,414.34. The S&P 500 added 13.23, or 1 percent, to 1,320.64. The Nasdaq composite gained 33.03, or 1.2 percent, to 2,773.52.
Companies that typically benefit from global expansion led the Dow. Intel Corp., Caterpillar Inc., and Hewlett-Packard Co. each gained more than 2.4 percent.
Stocks are still below the 2011 highs they reached in late April, when a series of weak economic reports indicated that the U.S. economy was slowing down. Since then investors have been debating whether the slowdown would be a short-term blip or the beginning of a long stall in the economic recovery.
"We have been in the camp that says it's temporary," said Brad Sorensen, a market analyst at Schwab. Sorensen says the pickup in Chicago manufacturing was the latest proof that the short-term slowdown view is correct
The manufacturing report, along with the government's formal end to its bond buying stimulus program known as QE2, sent bond prices lower as investors put less money into safer assets. The yield on the benchmark 10-year Treasury fell to 3.16 percent from 3.11 percent late Wednesday. Bond yields rise when prices fall.
Among U.S. companies, metals manufacturer Worthington Industries Inc. jumped nearly 10 percent after the company raised its quarterly dividend and said it would buy back up to 10 million shares of its own stock. Callaway Golf Co. fell 1.7 percent after the company shook up its leadership, announced job cuts and said it expects to have weak results in the second quarter. And fertilizer maker CF Industries Holdings Inc. fell 5.1 percent on news that farmers planted more corn in spring, which may weigh on prices and reduce farmers' income.
Three stocks rose for every one that fell on the New York Stock Exchange. Volume was average at 3.8 billion shares.