NEW YORK – Stocks rose sharply Thursday, putting the market on track for its fourth straight gain, after Greece cleared a final hurdle toward receiving its next installment of emergency loans. A pickup in manufacturing around Chicago also pushed indexes higher.
Greek lawmakers passed a cost-cutting bill that has been working its way through that country's parliament since Tuesday. The bill, which has caused violent protests in Greece, had to be approved before international lenders would release $17 billion in rescue funds that the country needs to avoid defaulting on its debt. A default by Greece would disrupt financial markets and lead banks to freeze lending to other heavily indebted European countries.
Traders were also reassured by encouraging signals on the U.S. economy. A trade group reported that manufacturing in Chicago sped up unexpectedly in June. Analysts had forecast a decline.
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 or not the slowdown would be a short-term blip before the recovery gets back on track.
"We have been in the camp that says it's temporary," said Brad Sorensen, a market analyst at Schwab. The pickup in Chicago manufacturing was the latest proof that the short-term slowdown view is correct, Sorensen said.
The Dow Jones industrial average rose 126 points, or 1 percent, to 12,387 in afternoon trading. About half of the gains came after the Greek parliament passed its austerity bill.
The Standard & Poor's 500 index rose 10, or 0.8 percent, to 1,318. The Nasdaq composite rose 34, or 1.1 percent, to 2,769.
Relief that Greece is buying more time to repair its budget has sent U.S. stocks higher all week. The Dow and S&P 500 are both up 4 percent this week and have risen every day since Monday. Prior to this week, the Dow and S&P had only one week of gains out of the past eight.
European stock indexes also jumped after the Greek vote. Germany's benchmark DAX index rose 1.1 percent. Most of the gains came shortly after the vote. The FTSE 100 index of leading British shares and France's CAC-40 both rose 1.5 percent.
Metals manufacturer Worthington Industries Inc. jumped 9 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 1.1 percent after the company shook up its leadership, announced job cuts and said it expects to have weak results in the second quarter.
Fertilizer maker CF Industries Holdings Inc. fell 4 percent on news that farmers planted more corn in spring, which may weigh on prices and reduce farmers' income.
The Dow average is heading for a small three-month gain a volatile quarter comes to a close. The Dow is up 0.5 for the second quarter, but the S&P 500 is down 0.6 percent. The Dow has gained 7 percent in the year to date, the S&P 5 percent.
Slightly fewer people applied for unemployment benefits last week, but the level of claims is still high at 428,000. New unemployment claims have stayed above 400,000 for 12 straight weeks, a sign that companies aren't hiring at a rate that can sustain job growth. The slowdown in hiring has caused concerns that the U.S. economy will take longer than expected to return to health.