The DOW is up over 200 points going into the close, with all major indices up over 2%, respectively.
All eyes are onGreece– it’s been a very volatile day, but current optimism is coming on European leaders renewed pledge to helpGreeceavoid defaulting on its debts.
The leaders ofGreece,FranceandGermanyagreed in a teleconference thatGreecewas an “integral” part of the 17-nation bloc that uses the euro.Greecealso agreed to abide by agreements to trim its debts. The statements were intended to calm fears thatGreecewas headed for a default on its debt or might be forced to exit the euro.
The threat of a Greek default and the damage it could wreak on financial markets has had investors on edge in the past two weeks, lifting Treasurys and weighing on stocks. The yield on the 10-year Treasury note hit a record low on Monday of 1.87 percent and the S&P 500 has only risen three days this month.
Additionally, we’re seeing a major short squeeze…
With very little real volume today, one good explanation for today’s pop in the afternoon is that shorts are covering. Yesterday, NYSE short interest came in at the highest levels since mid-2009. As the stock market melts up on wafer-thin volume and with nobody around left to sell, some of these shorts are covering their bets, which leads to higher prices, which leads to more short-covering. Meanwhile, long-only types who have taken a beating could be piling on still more stocks to try to make up their losses in a hurry.