Stocks Finish Higher After Reports of Greek Debt Deal

NEW YORK (TheStreet) -- Stocks closed higher Tuesday after Greek media reported that officials were close to signing an agreement that would help the country secure its next bailout.

The Dow Jones Industrial Average jumped 33.1 points, or 0.3%, at 12,878. More than half of the 30 components on the blue-chip index traded higher, with McDonald's(MCD) , American Express(AXP) and Coca-Cola(KO) leading gains. Leading losses were Verizon(VZ) , Boeing(BA) and Bank of America(BAC) .

The S&P 500 was up 2.7 points, or 0.2%, at 1347. The Nasdaq finished up 2.1 points, or 0.1%, at 2904, helped by Apple(AAPL) , which set an all-time high at over $468 per share.

"It certainly is impressive how this market has bounced back yet again from a weak start, but you have to wonder if the dip-buyers might be developing some overconfidence now," says James "Rev Shark" DePorre, founder and CEO of Shark Asset Management.

Around late morning Tuesday, there were reports that Greek party leaders would be signing a draft agreement on fiscal austerity measures, including pension and wage cuts, required to help secure a second bailout of € 130 billion ($171 billion) from its lenders of last resort -- the troika, or group consisting of the European Central Bank, International Monetary Fund and European Commission. Greek media reports said that the draft agreement has been completed and was in the hands of coalition leaders, who would be meeting with Greek Prime Minister Lucas Papademos.

Some € 30 billion of the bailout money would go to private sector creditors once released by the lenders. The release would eliminate the threat of a messy Greek default involving a € 14.5 billion ($19.1 billion) bond repayment by March 20.

Greek workers had been staging a 24-hour strike to protest the austerity measures, which could result in the loss of jobs for roughly 15,000 civil service employees. The party leaders backing the country's coalition government, who need to agree on the measures, remained in a bind ahead of the expected upcoming general elections.

"Unfortunately the negotiations are so tough that as soon as one chapter closes another opens," Greek Finance Minister Evangelos Venizelos had told Reuters the previous day after a meeting with the troika. A messy Greek default would seriously impact both banks across Europe and private creditors holding Greek debt.

Also today Federal Reserve Chairman Ben Bernanke said during a testimony before the Senate Budget Committee that the possibility of a sudden fiscal crisis has increased. He warned that interest rates can soar quickly if investors lose confidence in the ability of the government to manage its fiscal policy. Making no mention of last week's strong jobs report, Bernanke instead said that the labor market has a long way to go before it will return to normal. Bernanke essentially reiterated the thoughts on fiscal policy that he had presented to lawmakers the previous week.

"The market is just chopping around, directionless and currently without catalyst, either bullish or bearish," said Lou Brien, economic strategist at DRW Trading.

London's FTSE finished 0.03% lower, and Germany's DAX closed down 0.16%. In Asia, Japan's Nikkei Average closed down 0.13%, while Hong Kong's Hang Seng index finished lower by 0.05%.

In corporate news, Coca-Cola reported better-than-expected results for the fourth quarter Tuesday as the international beverage giant continued to expand international sales volume. The world's largest soft-drinks maker reported earnings of 79 cents a share on revenue of $11.04 billion as the company increased volume to China by 10% in the fourth quarter. The company was expected to earn 77 cents a share on revenue of $10.99 billion, according to Thomson Reuters. Coca-Cola shares rose 0.8% to $68.55.

BP(BP) , the oil giant, said fourth-quarter profit rose 38% to $7.69 billion on higher oil prices and it raised its quarterly dividend by 14%. Replacement cost profit jumped 65% to $7.6 billion. Revenue rose 15% to $96.3 billion. BP goes to court at the end of the month in New Orleans for the beginning of lawsuits related to the Gulf of Mexico oil spill in April 2010. Shares were off 0.6% to $46.60.

UBS(UBS) , the Swiss bank, posted a 76% decrease in fourth-quarter earnings. UBS said profit in the quarter was 393 million Swiss francs ($425 million). Analysts were expecting earnings of 658 million francs. UBS' investing bank division reported a second consecutive quarterly pretax loss of 256 million francs, which included a $2 billion rogue trader loss. Shares finished down 0.7% to $14.27.

Toyota(TM) , Japan's top automaker, lifted its annual earnings forecast after reporting a quarterly profit decline of 13.5% because of production shortages from last year's earthquake and tsunami. Toyota raised its annual profit forecast to 200 billion yen ($2.6 billion) from 180 billion yen a year earlier, but the new guidance is barely half of what Toyota earned -- 408 billion yen -- in the previous fiscal year. Cost cuts were behind the raised guidance, Toyota said. Shares added 2.4% to $79.61.

Yum! Brands(YUM) , the quick-service restaurant operator, beat analysts' fourth-quarter earnings expectations on strong sales growth in China. Yum!, whose restaurant brands include KFC, Taco Bell and Pizza Hut, also said it expects to meet or exceed its target for earnings per share growth of at least 10% in 2012. Shares gained 2.6% to $64.85.

Coinstar(CSTR) solidly topped analysts' views for fourth-quarter earnings and reached a deal to acquire NCR's(NCR) entertainment business, which includes DVD kiosks and inventory, among other assets. Earlier Monday, Coinstar announced a streaming content joint venture with Verizon. Coinstar shares surged 14% to $57.53, while NCR shares were jumping 8.5% to $20.65. Verizon closed down 0.2% to $37.92.

In other corporate news, Xstrata and Glencore plan to merge, creating a metals and mining giant worth roughly $90 billion and with the capability to produce and trade natural resources in five continents.

March oil futures finished up $1.50 to $98.41 a barrel, while April gold futures rose $23.50 to $1,748.40 an ounce, helped by a stronger euro and weaker dollar, and shaking off a two day decline that had left the metal down 2%.

The benchmark 10-year Treasury was falling 17/32, raising the yield to 1.972%, while the U.S. dollar index was falling 0.7% to $78.55.

No major U.S. economic announcements were expected on Tuesday.

-- Written by Andrea Tse and Chao Deng in New York.

>To contact the writer of this article, click here: Andrea Tse.