NEW YORK — Stocks rose Tuesday, sending the Standard & Poor's 500 Index to its highest level in three weeks, amid optimism that European nations will take action to prevent a Greek default and after Nike's earnings beat estimates.
The S&P 500 advanced 1.3 percent to 1,296.67, rising to the highest closing level since June 3. The Dow Jones Industrial Average increased 145.13 points, or 1.2 percent, to 12,188.69 today. More than 6.1 billion shares changed hands on U.S. exchanges, 14 percent less than the three-month average through Monday.
"The rally is a continuation of the global growth story," said Sean Kraus, chief investment officer at Citizens Business Bank in Pasadena, Calif. "There's relief around Greece. As a global company, people looked at Nike to say, 'Hey, how was the global economy really doing on the consumer side?' Because Nike actually had a very good quarter, that was a surprise to the market."
Energy, consumer discretionary and raw material companies posted the biggest gains today among 10 industries in the S&P 500, rising at least 1.7 percent. Since the index bottomed on March 16, defensive industries such as health care, telecommunications and utilities have risen the most as investors sought havens on speculation growth is slowing.
Global stocks rallied as two people with knowledge of the matter told Bloomberg News that Germany's biggest banks and insurers will meet with the Finance Ministry in Berlin today as they seek to reach an agreement on their contribution to a Greek aid package.
German and French lenders are the biggest European holders of Greek debt, and their participation in the plan is key to the European Union goal of getting banks to roll over at least $43 billion of bonds. The debt swap is part of a broader aid package European Union leaders have pledged to pass next month to prevent the euro region's first default a year after the Greek bailout that f ailed to stop the debt crisis.
Nike jumped 10 percent to $89.90. CEO Mark Parker has boosted sales and reduced marketing costs from a year earlier, when Nike promoted around the World Cup, to fight rising costs for cotton, labor and transportation that have reduced profitability in the apparel industry this year.
"Nike had strong earnings," said Dan Veru, chief investment officer at Fort Lee, N.J.-based Palisade Capital Management. "We're coming into earnings season, which is going to be good. What is going to drive the stock market is going to be earnings. U.S. companies are doing very well."
Alcoa is the first Dow average company to report second- quarter earnings on July 11. Earnings at S&P 500 companies rose 13 percent in the three-month period ending June 30, according to a Bloomberg survey with analysts. Net income will rise 20 percent in 2011, the data showed.
The Morgan Stanley Cyclical Index rose 1.5 percent as 29 of its 30 stocks rallied. The Dow Jones Transportation Average of 20 stocks, a proxy for economic growth, added 1.4 percent. The S&P GSCI Index of 24 commodities advanced 2.2 percent as crude oil rebounded from a four-month low and metals rallied.