European officials are moving closer to signing off on a new aid package for Greece at an emergency meeting in Brussels. German Chancellor Angela Merkel said European officials want to tackle the “root” of the crisis.
A draft statement says European Union members and the International Monetary Fund are ready to line up more rescue loans for Greece.
They also plan to lower interest rates for the loans and extend due dates from 7.5 years to 15 years. The loan terms would also apply to Ireland and Portugal, two other countries struggling with their debts.
Worries about Europe’s debt crisis have been hanging over financial markets for months. The fear is that a default by Greece or another deeply indebted country could freeze debt markets and cause other damage to Europe’s banking system.
Expectations that a deal was close lifted stocks in afternoon trading. Oil rose above $100 a barrel for the first time since June. The euro rose against the dollar and U.S. government bond prices fell, raising their yields.
The yield on the 10-year Treasury rose to 3.00 percent, up from 2.93 percent late Wednesday. The euro rose about a penny to $1.43.
The Dow Jones industrial average rose 120 points, or 1 percent, to 12,692. The S&P 500 index rose 14 points, or 1 percent, to 1,340.
The Nasdaq rose 14 points, or 0.5 percent, to 2,828.
Bank stocks were broadly higher. Morgan Stanley gained more than 9 percent. The investment bank’s quarterly loss was much smaller than analysts expected, thanks to an increase in trading revenues.
Technology stocks rose less than the rest of the market. Intel Corp. slipped 1 percent after the chip maker said it expects weaker PC sales for the rest of the year.
In a deal announced Thursday, Express Scripts said it would buy Medco Health Solutions for $29.1 billion. The merger would combine the largest U.S. pharmacy benefits managers. Medco’s stock rose 15 percent and Express Scripts gained 6 percent.
A measure of manufacturing activity in the Philadelphia region rose in July after reaching a two-year low during the previous month.
Stronger earnings pushed the stocks of Union Pacific Corp. and Philip Morris International up more than 4 percent. Philip Morris’s net income rose more than 21 percent. The cigarette maker also increased its full-year earnings forecast.
Union Pacific’s profit increased 10 percent thanks to higher shipping prices and a pickup in the number of carloads it carries.
The stock market edged lower on Wednesday. Analysts say concerns about lifting the U.S. debt limit outweighed strong earnings from Apple Inc. and a slew of corporate deals.
Advanced Micro Devices Inc. and Microsoft Corp. are scheduled to report earnings after the market closes.