Stock futures rise on Greek agreement after S&P ends flat

By Sinead Carew

NEW YORK (Reuters) – Stock futures rose late on Wednesday after Europe agreed on a way forward with Greece on debt negotiations that had been holding back U.S. investors worried about European stability.

The S&P 500 <.SPX> index had finished the regular session unchanged on Wednesday as investors were worried about making big bets while they waited for the outcome of the Greece talks.

Greek Finance Minister Yanis Varoufakis began talks with euro zone finance ministers earlier in the day after his new leftist-led government won a parliamentary confidence vote for its refusal to extend an international bailout.

But Luxembourg’s finance minister said late in the day that European officials had agreed on a way forward and that discussions would continue.

The Global X FTSE Greece 20 ETF <GREK.K> rose as much as 11 percent in after hours trading following the reports of an agreement.

“It’s a relief for the market. I think it will react positively. I thought they would go down to the wire,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

The standoff had kept U.S. investors from making any big bets, market participants had said earlier in the day.

“This Greek drama has been a huge overhang over the market. We’ve been held hostage and ignoring all sorts of other news, for example good economic news on the jobs front, earnings that have been more good than bad,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

National Bank of Greece’s <NBG.N> U.S. shares rose 16 percent in late trade to $ 1.45 after the news.

Adding to the market’s uncertainty, the leaders of France, Germany, Russia and Ukraine began peace talks in Belarus, while in Ukraine pro-Moscow separatists tightened the pressure on Kiev by launching some of the war’s worst fighting.

The Nasdaq <.IXIC> was boosted late in a lackluster session by a 2.3 percent gain in Apple Inc <AAPL.O> shares after activist investor Carl Icahn issued a letter saying the iPhone maker should be valued at $ 216. Apple closed at $ 124.88.

The Dow Jones industrial average <.DJI> fell 6.62 points, or 0.04 percent, to 17,862.14, the S&P 500 <.SPX> lost 0.06 points to 2,068.53 and the Nasdaq Composite <.IXIC> added 13.54 points, or 0.28 percent, to 4,801.18.

Despite some high-profile earnings misses from big multinational companies, largely as a result of dollar strength, Thomson Reuters data through Wednesday morning showed 72.4 percent of the 352 S&P 500 components that have reported results topped expectations, above the 69 percent beat rate in the past four quarters. The earnings growth rate for the quarter stands at 6.7 percent.

About 6.4 billion shares changed hands on U.S. exchanges, below the 7 billion average for the last five sessions, according to BATS Global Markets.

Declining issues outnumbered advancing ones on the NYSE by 1,679 to 1,400, for a 1.20-to-1 ratio; on the Nasdaq, 1,474 issues fell and 1,209 advanced, for a 1.22-to-1 ratio favoring decliners.

The S&P 500 posted 39 new 52-week highs and 1 new low; the Nasdaq Composite recorded 81 new highs and 50 new lows.

(Additional reporting by Chuck Mikolajczak and Rodrigo Campos; Editing by Chizu Nomiyama, Nick Zieminski, Meredith Mazzilli and Chris Reese)