Stocks pare gains; Nasdaq sets intraday high on Greece hopes

U.S. stocks rallied on Monday as investors remained optimistic on a deal between Greece and its creditors. ( Tweet This )

The Nasdaq hit a new intraday record, topping the 5,143.32 high set on Thursday. The Russell 2000 also touched a new intraday high.

“The two binary issues out there was the Fed and Greece, and both of those (appear) resolved for the next 12 to 18 months,” said Jack Ablin, chief investment officer at BMO Private Bank.

Stocks came off session highs in midday trade as investors weighed euro zone leaders’ remarks on the Greece debt talks. “We may well be in a position where it’s hard to see how optimistic we should be on Greece,” said Art Hogan, chief market strategist at Wunderlich Securities. The Dow Jones industrial average traded about 100 points higher after gaining as much as 166 points. Goldman Sachs, JPMorgan Chase and American Express rose about 1 percent or more to be among index leaders. Financials gained nearly 1 percent as the second-best performer in the S&P 500. The Dow transports briefly rose more than 1 percent as airlines surged. Barron’s gave a favorable outlook on the sector based on lower fuel costs and lack of competition. Dow futures traded about 150 points higher ahead of the open, following a surge in European equities on hopes of resolution in the Greece debt talks. “Today is obviously all about Greece and the fact there might be some breaking of the ice,” said Ben Pace, chief investment officer at HPM Partners. “Perhaps the market’s getting a little ahead of itself because it’s just talks, but there’s light at the end of the tunnel.” The German DAX closed up more than 3.5 percent, while the STOXX Europe 600 gained 2 percent. The ATHEX Composite leaped 9 percent. Read More Key actors to take stake in Greek drama in week ahead The Eurogroup of euro zone finance ministers concluded a meeting in Brussels on Monday and will meet again later in the week on the Greek debt crisis. German chancellor Angela Merkel said in a Reuters report there was no basis on which Greece’s creditors could make a decision and that Monday’s summit of euro zone leaders was only advisory in nature. Eurogroup President Jeroen Dijsselbloem said Greece’s new proposals are a “welcome step” but not enough to solidify a deal today. Over the weekend, Greece’s Prime Minister Alexis Tsipras showed new willingness to make concessions that would unlock aid needed to avoid a default. In a phone call with the Tsipras, U.S. Treasury Secretary Jack Lew, urged Greece again to make a “serious move” at reaching a deal with its creditors, saying it needed to quickly submit proposals that were credible, a Treasury official said in a Reuters report. The cash-strapped country faces a 1.5 billion euro ($1.7 billion) payment to the International Monetary Fund (IMF) at the end of the month. There has been intense speculation that if no deal is reached, Athens would need to impose capital controls to avoid a banking crisis as savers withdraw their bank deposits. The European Central Bank raised the ceiling on emergency liquidity for Greek banks for the third time in six days, a banking source told Reuters on Monday. Read More Greece gets funding lifeline; crunch talks continue Peter Boockvar, chief market analyst at The Lindsey Group, said markets should look beyond Greece and focus on the global rise in interest rates. “For U.S. stocks, I don’t think they’ve blinked much over the past few months over worries with Greece. The euro by the way is flat on the day,” he said in a morning note. The U.S. dollar traded flat, with the euro holding near $1.134. The U.S. 10-year Treasury yield(U.S.:US10Y) jumped to 2.36 percent. The German 10-year bund yield surged to trade near 0.88 percent. Greek yields on 10-year and 2-year bonds fell sharply from highs hit on Thursday. Bruce Bittles, chief investment strategist at RW Baird, said the movement in the bond market was a reversal of Friday’s flight to safety amid uncertainty over Greece. Outside of Friday’s pullback, Bittles said, “I think the turn came on Thursday, basically when the Fed pretty well assured markets they would remain accomodative.” He also cited continued improvement in economic data and investor sentiment. Stocks rallied last week on the dovish Fed statement, with the Nasdaq Composite topping its 15-year high set in March 2000 during the tech bubble. In economic news Monday, existing home sales jumped 5.1 percent in May to a 5-1/2-year high. Durable goods and the third read on first-quarter gross domestic product are due later in the week. In corporate news, Sequential Brands (SQBG) will buy Martha Stewart Living (MSO) for $6.15 a share in cash and stock. Health care insurers remain in focus. Over the weekend, Cigna (CI) rejected Anthem (ANTM)‘s $47 billion takeover proposal amid Cigna’s and Aetna (AET)‘s attempts to buy Humana (HUM). Read More Early movers: CI, WMB, PFE, ALL, AAPL, BAX & more Energy Transfer Equity (ETE) fell more than 2.5 percent following news the energy assets portfolio firm confirmed an unsolicited $48 billion big for natural gas firm Williams Companies (WMB), according to Reuters. The Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) traded up 100 points, or 0.56 percent ,at 18,116, with Merck (MRK) leading all blue chips higher and Cisco (CSCO) the greatest laggard. The S&P 500 (^GSPC) traded up 12 points, or 0.60 percent, at 2,122, with energy leading all 10 sectors higher. The Nasdaq (^IXIC) traded up 31 points, or 0.61 percent, at 5,148. The CBOE Volatility Index (VIX) (^VIX), widely considered the best gauge of fear in the market, traded below 13. About three stocks advanced for every two decliners on the New York Stock Exchange, with an exchange volume of 348 million and and a composite volume of nearly 1.8 billion in afternoon trade. Crude oil futures fell 30 cents to $59.31 a barrel on the New York Mercantile Exchange. Gold futures fell $17.70 to $1,184.40 an ounce as of 1:54 p.m. On tap this week: Tuesday

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