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 Investors had awaited a deal all week. As talks for a deal
progressed, Germany's DAX index hit a record intraday high and
Britain's top share index closed within 0.5 percent of a 15-year
high before the accord was announced.
The euro rebounded and the benchmark 10-year U.S. Treasury note
retreated. Europe's leading equities index closed at seven-year
highs in anticipation a deal would be reached.
The Greek accord will allow investors to concentrate on the
fundamentals that should be driving the market, said Ben Pace, chief
investment office at HPM Partners in New York.
"You're seeing a little bit better U.S. economic statistics than
you've been seeing over the past three or four weeks. The European
statistics have gotten a lot better too," Pace said. "So maybe a
relief rally today, because the markets were down as there was a lot
of consternation going around."
Surveys indicated on Friday that the euro zone's private sector
expanded in February at its fastest pace in seven months, though
companies continued to cut prices, suggesting low inflation remains
a challenge for policy-makers.
The euro pared losses against the U.S. dollar to trade up 0.1
percent at $1.1377. Against the yen, the dollar pared losses to
trade up 0.13 percent at 119.09.
MSCI's all-country world equity index rose 0.34 percent, while the
European FTSEurofirst 300 index of top regional shares closed up
0.33 percent at 1,525.21.
The Dow Jones industrial average closed up 154.67 points, or 0.86
percent, to 18,140.44. The S&P 500 gained 12.85 points, or 0.61
percent, to 2,110.3 and the Nasdaq Composite added 31.27 points, or
0.63 percent, to 4,955.97.
The Nasdaq matched an eight-session winning streak from a year ago
and inched closer to its March 2000 all-time high reached during the
dot-com bubble.
For the week, the Dow rose 0.7 percent, the S&P 500 gained 0.6
percent and the Nasdaq rose 1.3 percent.
Greek bond yields pushed lower on hopes euro zone finance ministers
would reach a deal.
Greek three-year yields dropped 57 basis points to 16.555 percent,
pulling further away from last week's highs above 22 percent.
The Greek stalemate overshadowed data pointing to growth in Germany
and France. Markit's Composite Flash Purchasing Managers' Index rose
to its highest since July, beating the highest forecast in a Reuters
poll of economists.
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Halfway into the European earnings season, results have been strong.
Fourth-quarter earnings are expected to grow 19.5 percent, which
would be the best quarter in 3-1/2 years.
The FTSEurofirst 300 is up 11.4 percent so far this year, outpacing
a 2.6 percent gain in the S&P 500. The ECB's plans to buy government
bonds to boost the economy has helped the rally.
The gap between the yield of 10-year U.S. Treasuries and the
earnings yield of the S&P 500 is at its widest in 40 years, noted
Alex McKnight, a portfolio manager at GAM in New York.
"We see global yields as ridiculously suppressed, be it the U.S, be
it Europe," McKnight said. "This is the level (at which) I may not
be piling into equities right here, but I don't think they're bad
value" relative to government bonds, high-yield or investment grade
credit, he said.
U.S. Treasury debt prices rose in early trading, boosted by
safe-haven buying as investors worried about the likelihood of a
Greek deal. They later reversed course. Benchmark 10-year Treasuries
fell 2/32 in price to yield 2.1187 percent.
Brent crude oil steadied above $60 a barrel as news of a falling
U.S. rig count outweighed concerns about oversupply.
Brent crude futures for April settled up 1 cent at $60.22 a barrel.
U.S. crude for March delivery fell 82 cents to settle at $50.34. The
contract expires on Friday.
(Reporting by Herbert Lash; Additional reporting by Emelia
Sithole-Matharise, Alastair Smout and Jemima Kelly; Editing by Dan
Grebler, Chizu Nomiyama and Chris Reese)
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