Stocks were higher Friday amid choppy trading after French President Nicholas Sarkozy hinted at a deal to resolve the Greek debt crisis and after investors were encouraged by a positive reading on the leading indicators index.
The Dow Jones Industrial Average gained, led by Verizon and DuPont after finishing higher amid choppy trading in the previous session.
The S&P 500 and the tech-heavy Nasdaq were also higher. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 22 after surging to its highest level since mid-March during the previous session.
All three indices are on track for their first weekly gain since April, snapping a six-week losing streak.
All key S&P sectors were higher, led by utilities, telecom and financials.
Today is quadruple witching, when contracts on stock index futures, stock index options, stock equity options, and single stock futures expire. Quadruple witching happens once every quarter, on the third Friday of March, June, September and December.
“The market seems to be looking for reasons for a bounce,” said Howard Ward, portfolio manager of the GAMCO Growth Fund. “The market has reached a little too far in the bearish way, but at the same time, it’s too earlyt o say this correction is over—I don’t think 7 percent is enough to blow the all-clear whistle.”
“This is a tough time to trade,” said Randy Frederick, Director of Trading and Derivatives at Charles Schwab. “The summer months are going to be tough—I expect choppy, but tight ranges.”
However, Frederick remains optimistic about the year overall.
“In the third and fourth quarters, we’ll see a rebound,” he said. “When QE2 goes away, it will take a few weeks for people to have confidence and for the markets will battle back and forth. If [markets] can maintain their levels, it will give confidence that they are capable of going on their own.”
Merkel and French Sarkozy said at a press conference said that they were united behind a new aid package for Greece that would include voluntary private sector participation on the basis of the so-called "Vienna Initiative."
The news came after Greece's prime minister appointed Evangelos Venizelos as finance minister, replacing the unpopular George Papaconstantinou.
Ward noted that gold is where investors should hedge their bets as a way to protect themselves from the euro. Gold prices rallied near $1,537 an ounceas the Greek debt crisis raised risk aversion.