World shares stay firm on Greece optimism

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The tone on Wall Street and Europe's equity markets remained positive overnight amid optimism the EU is making progress in its efforts to avert a Greek default.

In late afternoon trading, the Dow Jones Industrial Average gained 1.04 per cent, the Standard & Poor's 500 Index rose 1.09 per cent and the Nasdaq Composite Index climbed 1.30 per cent.

All eyes are on Greek lawmakers who will vote on Wednesday and Thursday on an austerity package required by international lenders as a condition for further aid. Protests turned violent in Athens and unions representing government workers called for a 48-hour strike.

"The only way to avoid immediate default is for parliament to endorse the revised economic program ... They must be approved if the next tranche of financial assistance is to be released," the EU's top economic official, Olli Rehn said in a statement.

Germany's biggest banks and insurers will meet with the Finance Ministry in Berlin on Wednesday as they seek to reach an agreement on their contribution to a Greek aid package, Bloomberg News reported, citing two people with knowledge of the matter.

"With the German banks on board, you find the solution which alleviates some of the European debt problems," Tom Wirth, senior investment officer for Chemung Canal Trust in Elmira, New York told Bloomberg. "If you can get beyond that sovereign crisis, then confidence comes back and we can see a rally in risk assets."

Yesterday French banks agreed to a plan that will see them roll over a majority of their Greek securities.

Meanwhile, French Finance Minister Christine Lagarde, 55, was elected the managing director of the International Monetary Fund. She starts her five-year term on July 5. Her election was endorsed by the US and Russia.

The euro rose 0.5 per cent to US$1.4357.

In US corporate news, Nike jumped more than 7 per cent after reporting fourth-quarter earnings that surpassed expectations, while orders indicated further strength ahead. That's despite the fact that American consumers have turned gloomy.

The Conference Board, a private-sector industry group, today said its index of consumer attitudes fell to 58.5 in June from a revised 61.7 in May, and short of expectations for 60.5.

On a positive economic note, the S&P/Case-Shiller composite index of single-family home prices in 20 metropolitan areas dipped 0.1 per cent month-over-month on a seasonally adjusted basis. A Reuters poll of economists had forecast a decline of 0.2 per cent.

A US$35 billion auction of five-year US Treasury notes drew tepid demand. The US will sell US$29 billion of seven-year notes tomorrow.

Crude rose, bolstered by optimism about Greece and ahead of the US Independence Day weekend, typically the peak consumption period for American motorists.

"There is some strength in the market ahead of the Greek austerity package," Matt Smith, a commodities analyst for Summit Energy Services in Louisville, Kentucky told Bloomberg.

"There's solid demand coming through for petrol aided by the fall we've seen in the retail price ahead of the holiday."

Crude for August delivery was up 1.5 per cent to US$91.95 a barrel at 1.48pm on the New York Mercantile Exchange.

Spot gold was 0.2 per cent stronger at US$1,499.11 an ounce by 1.52pm EDT. US gold futures for August delivery settled US$3.80 higher an ounce at US$1,500.20.