Stocks gained for a third straight day on Wednesday as Euro zone leaders put their backing behind Greece and pledged that it would provide the assistance needed to stop the debt stricken country from defaulting on its debts. The Dow Jones gained over 140 points to close at 11,246.73 while the S&P 500 gained over 15 points to close at 1,188.69.
Angela Merkel took the first steps to relieve investor fears on Monday by stating that Greece would not default on its debts and slip into bankruptcy. Merkel stated that Greece should receive the financial aid it needs in order to stabilize the country’s financial crisis.
World markets have been on edge with the looming threat that Greece could go bankrupt and send other economies around the world into a downward spiral as many major banks own Greek bonds. The European economy is growing at an extremely slow rate and it is expected that if Greece does default on their debt that it could send Europe into another recession. Germany and France are desperate to avoid that scenario which has lead to the two European heavyweight to throw their backing behind Greece on Wednesday.
Through a teleconference Greece, France and Germany agreed that Greece was an integral part of the European Union which calmed fears that Greece would be allowed to default or even drop the euro all together. Greece reaffirmed its commitment to its budget plan on the conference call which also gave investors renewed confidence.
Dow Jones components Home Depot (NYSE:HD), Disney (NYSE:DIS) and General Electric (NYSE:GE) all posted the largest gains on the index Wednesday.
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