Stocks closed higher Tuesday, reversing their earlier losses, amid optimism that Greece may be nearing a rescue deal.
The Dow Jones Industrial Average rose 33.07 points, or 0.26 percent, to close at 12,878.20, led by McDonald's and Disney .
The S&P 500 added 2.72 points, or 0.20 percent, to finish at 1,347.05. The Nasdaq gained 2.09 points, or 0.07 percent, to end at 2,904.08, reaching a fresh 11-year high.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished below 18.
Among the 10 S&P sectors, utilities posted the biggest gain, while materials lagged.
"Any selloff, no matter how short and shallow is being used as a buying opportunity," wrote Elliot Spar, chief market strategist at Stifel Nicolaus, in his daily note. "It feels like some money managers are still under-invested while those shorting have to take them back when it doesn’t work. Thus, the march higher."
Stocks reversed their losses following reports Greek Prime Minister Lucas Papademos was going to meet with party leaders to discuss a draft bailout agreement. However, a subsequent report said the meeting had been postponed to Wednesday.
The euro rallied against the U.S. greenback, climbing to its highest in about eight weeks.
Meanwhile, protestors took to the streets in Athens to oppose austerity measures as leaders started another round of talks to secure a bailout and avert default. A messy default in Greece could lead to problems for other euro zone countries and hinder the U.S. recovery.
“I’ve been impressed with the markets in the last few weeks—we seem to be desensitized to news in Europe and it’s not having as big of an impact as in the past,” said Mickey Cargile, founder and managing partner of Cargile Investment Management. “It’s a realization that [Europe] doesn’t have as big of an impact on the economy as it once did and we’re making the assumption that some solution will be reached.”
