Major stock indexes flirt with setting multiyear highs

 

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Rabobank fixed income analyst Richard McGuire noted that Greece is facing a bond repayment on Aug. 20, and that a ruling by Germany's constitutional court on the legality of one of Europe's bailout funds and national elections in the Netherlands are both coming on Sept. 12. He said the possible outcomes of these events are beginning to creep into investors' calculations.

Stocks in Asia registered broad gains. Japan's Nikkei 225 index rose 0.8% to close at 9,162.50 — its highest finish in more than three months, as the government forecast the country will soon emerge from its 15-year battle with deflation. Hong Kong's Hang Seng added 0.8% to 20,116.07 and Australia's S&P/ASX 200 gained 0.9% to 4,370.10.

Analysts were skeptical about Tokyo's optimism.

"I think the main thing coming out of the macro side is that It looks like the U.S. economy is growing, albeit slowly," said Lorraine Tan, director at S&P's equity research in Singapore.

South Korea's Kospi fell by 0.6% to 1,946.54. Mainland Chinese shares were mixed. The Shanghai Composite Index gained 0.1% to 2,114.89. The Shenzhen Composite Index lost 0.3% to 876.93.

Crude oil futures were down 20 cents to $95.40 per barrel on the New York Mercantile Exchange, following a strong rise Thursday.

In currencies, the euro fell to $1.2323 from $1.2362 late Thursday in New York. The dollar rose to 79.47 yen from 79.25 yen.

In the U.S., a new post-financial crisis high would be a psychological boost to investors and demonstrate the market's resilience under tough conditions, says Mark Luschini, chief investment strategist at Janney Montgomery Scott.

"It's evidence that the recovery in the economy, which many investors don't think has occurred fully, is real, and stocks reflect it," Luschini says. "It might also spark an interest from investors that have been wary of stocks. Hitting a post-crisis high is a tangible demonstration that the market is resilient, that it came back, that investments recover even from brutal declines, and that a patient investor can make money in stocks."

The market still has a long way to go before hitting a new all-time high, however. The S&P 500 remains more than 9% below its record close of 1565.15 hit on October 9, 2007. And the Dow remains more than 900 points shy of its 2007 peak of 14,164.53.

Contributing: The Associated Press