Wall Street set to open higher after Greece deal
Stocks were poised for a modestly higher open on Tuesday after euro zone finance ministers secured a deal that will enable Greece to avoid a March default.
An agreement on a 130 billion euro ($172.47 billion) bailout was reached after Greece was forced to accept unpopular fiscal measures, and private sector bondholders agreed to steeper losses.
After hitting a seven-month high on Monday, the FTSEurofirst 300 <.FTEU3> index of top European shares lost 0.5 percent and the euro shed about 0.1 percent on Tuesday as investors booked profits after the agreement.
Analysts said the deal was already priced into the market, which showed a muted response as initial optimism waned on questions about Greece's dismal economic outlook. <.EU>
Even with the new bailout, Greece faces a long road to economic recovery. European Union officials said the Greek economy will only return to growth in 2014 after a recession that will shrink output by 17 percent.
It's been digested, rehashed, priced into the market and though it is nice to see it (at) a point where we have a second deal, it doesn't lend investor confidence to think the ultimate outcome of what is going on in Greece is going to be something to help the euro zone turn on a dime, said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
So great to see, certainly positive for the markets, but it is a very cautious optimism the markets have because we are not sure when the next Greek headline is going to come out that causes concern.
S&P 500 futures gained 3.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 46 points, and Nasdaq 100 futures added 5.5 points.
U.S. markets were closed Monday for the Presidents Day holiday. The S&P 500 is up 8.2 percent for the year.
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(Reporting By Chuck Mikolajczak; editing by Jeffrey Benkoe)
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