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Stocks higher after Greek leaders clinch deal

By msnbc.com news services

U.S. stocks moved higher Thursday after Greek leaders clinched a long-stalled deal on reforms and data indicated the U.S. labor market continued to improve.

Futures reversed losses and turned positive after sources said leaders from major Greek parties had agreed on reforms and austerity measures needed in exchange for a new bailout package to avoid a chaotic default.

Also bolstering the tone was a report showing jobless claims fell last report, underscoring a firming in the labor market, following a better-than-expected payrolls report last week.

But gains sparked by the news from Greece were somewhat muted as stocks have been decoupling from events in Europe this year, leaving the possibility for investors to book some profits as the S&P 500 has risen more than 7 percent year to date.

"There is definitely a whiff of sell the news in the air, just given the claims number and the Greek deal. We've climbed this wall of worry and the first reaction for people is to hit the sell button," said Michael Marrale, managing director and head of sales trading at RBC Capital Markets in New York.

"It's tough to find any real reasons to sell here that haven't been fully flushed out in the marketplace outside of the move we've made."

European shares extended gains on the news, with the FTSEurofirst 300 index of top European shares up 0.6 percent.

The European Central Bank held its main interest rate at 1.0 percent on Thursday. Markets were watching to see whether the bank is ready to help Greece avoid a messy default.

The Bank of England voted to inject another 50 billion pounds into the financial system as part of its efforts to shore up a fragile recovery.

PepsiCo Inc fell 2.9 percent to $64.80 premarket after the beverage maker posted higher quarterly profit, said it will cut 8,700 jobs and spend $500 million to $600 million to boost sales in North America.

Cisco Systems Inc posted second-quarter results that beat estimates after the close Wednesday and hiked its quarterly dividend. Shares dipped 1.1 percent to $20.21 in premarket trading.

Groupon Inc slumped 10.5 percent to $22 premarket. The daily deal website's posted an unexpected loss in the first quarterly report since it went public.

Other companies expected to post results Thursday include Expedia Inc Pitney Bowes Inc and Philip Morris International Inc.

Through Wednesday morning, of the 315 companies in the S&P 500 that have reported earnings to date, 61.0 percent have been above analyst expectations, tracking below the pace of recent quarters.

Reuters contributed to this report.