NEW YORK —Stocks staged an afternoon-long rally and closed higher Wednesday as Greece appeared to close in on the cost-cutting deal it needs to keep from defaulting on its national debt.
The Dow Jones industrial average gained 5.75 points to close at 12,883.95 after falling as much as 60 points at midday. It was the Dow’s highest close since May 19, 2008, the last time it finished above 13,000.
The Standard & Poor’s 500 index edged up 2.91 points to 1,349.96. The Nasdaq composite rose 11.78 points to 2,915.86, its highest close since December 2000. Financial and technology shares gained the most in the S&P 500 among 10 groups.
“There’s just a news vacuum,” James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, said in a telephone interview. “If you just get Greece to come out with anything, you can actually maybe have people move on. I do think they are going to come out with some sort of agreement. That would be a big step forward in dealing with Europe’s debt crisis.”
After three days of delays, Greek government leaders met in Athens to go over a deal on steep cuts in public spending demanded by the country’s lenders. European leaders will meet today in Brussels to discuss a $170 billion bailout for Greece.
Investors are worried that Greece will default on its debt next month, which could roil financial markets and cause major losses for banks and other investors that hold Greek debt. Several deadlines have passed without an agreement.
Stock trading has been relatively quiet this week after a slow but steady rise since the beginning of the year. The Dow has added 2 percent in February and is up 5.5 percent for the year.
Rick Fier, vice president of stock trading at Conifer Securities in New York, said he wasn’t that worried that the market’s advance has slowed this week. The S&P 500 is still up 7.3 percent for the year and has fallen on only eight days in 2012.
Fier said he is concerned that the batch of earnings reports from U.S. companies for the last three months of last year “hasn’t been as robust” as previous quarters. Revenue growth has slowed, even though profits have been strong, he said.
