Wall Street moved higher Thursday as strong uptake by investors in Greece's debt swap fed optimism a deal could be completed by a deadline later in the day, staving off a messy default.
A Greek official said the percentage of holders accepting a deal was very high, adding the government was hopeful ahead of a 3 p.m. ET deadline. Greece must have the bailout deal cleared by March 20, and missing a payment would put the country in default and potentially destabilize the euro zone's financial system.
"This thus sets the stock market up for a major test when the official news is out as the market tries to retest last week's high," Peter Boockvar, equity strategist and portfolio manager at Miller Tabak, said in emailed comments.
New U.S. claims for unemployment benefits unexpectedly rose last week, but was not enough to change perceptions the labor market was strengthening, a key factor in the current stocks rally. The data comes ahead of the closely watched payrolls data on Friday.
Bank and commodity-related stocks rose. Investors have been buying and selling the sectors this week as risk aversion ebbed and flowed ahead of the Greek deal. Morgan Stanley rose 2.1 percent to $18.25, while Alcoa Inc gained 1.8 percent to $9.72.
The S&P 500, up over 20 percent from October lows, reached a high this year of 1378.04, a level analysts see as tough to break through.
McDonald's Corp reported a smaller-than-expected rise in February same-restaurant sales, weighed down by weakness in Europe and Asia/Pacific, the Middle East and Africa. The shares fell 3.7 percent to $96.50 premarket.
The European Central Bank held interest rates at 1.0 percent for the third month running, while the Bank of England also left its monetary policy unchanged.
Brazil slashed rates more than expected on Wednesday, stepping up a battle to revive struggling industries that threaten to derail a recovery in Latin America's largest economy.
Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York said despite the strong uptrend in the stock market, he was increasingly concerned about the outlook for first-quarter corporate earnings. Margin contraction and earnings misses could hit the market hard later this year, he said.
"Right now the market is still in a pronounced uptrend so we are not taking any chips off the table yet, but we are identifying positions that we think are most vulnerable," he said.
A strong geomagnetic storm is racing from the sun toward Earth, and its expected arrival on Thursday could affect power grids, airplane routes and space-based satellite navigation systems, U.S. space weather experts said.
Reuters contributed to this report.
