The stock markets in the United States gained after the finance ministers in the European region approved the package of new economic measures for Greece. The approval also paves that way for an extension of the bailout agreement for the country.
The list of approved measures is a requirement for extending the availability of financial aid for Greece for four months. The existing bailout is scheduled to expire by the end of this month.
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Greece committed to maintain its current state-asset sales, consolidate pension funds to reduce costs and overhaul tax collection and administration.
The European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF) reviewed Greece’s list of commitments before it was given to the region’s finance ministers for approval.
The stock markets also benefited from the statement of Federal Reserve Chairperson Janet Yellen that an interest rate hike remained unlikely during her testimony before the Congress today.
She said the Federal Open Markets Committee (FOMC) continued to maintain the target range for the federal funds rate at 0 to 0.25%. According to her, the assessment of the FOMC that it can be patient in beginning to normalize policy means that it is unlikely that economic conditions warrant an increase in the target range for the federal funds rate for at least a couple of meetings.
Yellen also said that a “high-degree of policy accommodation remains appropriate to foster improvements in labor market condition, and to promote a return of inflation toward 2% over the medium-term.”
Eric Green, head of U.S. rated and economic research at TD Securities commented that Yellen’s statement was viewed by the bond market that a September hike may be put out of the question.
- Dow Jones Industrial Average (DJIA) – 18,209.19 (+0.51%)
- S&P 500- 2,115.48 (+0.28%)
- NASDAQ- 4,968.12 (+0.14%)
- Russell 2000- 1,233.98 (+0.17%)
- EURO STOXX 50 Price EUR- 3,547.10 (+0.78%)
- FTSE 100 Index- 6,949.63 (+0.54%)
- Deutsche Borse AG German Stock Index DAX- 11,205.74 (+0.67%)
- Nikkei 225- 18,603.48 (+0.74%)
- Hong Kong Hang Seng Index- 24,750.07 (-0.35%)
- Shanghai Shenzhen CSI 300 Index- 3,522.32 (+0.65%)
Stocks in Focus
The stock price of Tesla Motors dropped almost 2% to $204.11 per shares. Analyst at Bank of America Merrill Lynch issued a report indicating that the weekly production levels of the electric car manufacturer declined to a level that could threaten its ability to reach its target by the end of this year.
TRACON Pharmaceuticals surged more than 23% to $12.52 per share after analysts at Needham initiated coverage on the stock with a Buy rating.
The shares of Qorvo, a provider of core technologies and radio frequency (RF) solutions gained more than 6% to $69.34 per share. The company announced the launching of its expanding portfolio of RF solutions for smartphones, tablets and other mobile data devices at the 2015 Mobile World Congress.