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Stocks edge higher after Greek debt deal

By msnbc.com news services

U.S. stocks edged higher on Thursday after Greece reached a deal to secure a financial bailout, but investors took a wait-and-see attitude in a market that has become extended after weeks of gains.

With the Dow near its highest since 2008, market participants expressed caution about Europe and awaited further details and progress on Greece's efforts to deal with its debt.

Tech shares, led by Apple Inc, gave a lift to the Nasdaq index and were the session's strongest sector.

Leaders from major Greek parties agreed on reforms and austerity measures needed in exchange for a new bailout package to avoid a chaotic default.

"There's some optimism that Greece has made it this far, but the reaction is muted because we've seen this before and there's still a lot of caution about Europe," said Brian Battle, vice president of trading at Performance Trust Capital Partners in Chicago.

Euro zone officials say the full package must be agreed with Greece and approved by the EU, IMF and European Central Bank by Feb. 15, so legal paperwork can be completed in time to avoid a chaotic default that could threaten the global economic recovery.

In a measure of how extended the market has become, well over 75 percent of S&P 500 stocks are trading above their 26-week moving average. Nearly six weeks of back-to-back gains have left the index up 7 percent this year.

"At these levels all the good news is priced into markets," Battle said. "We'd have to have something substantially good for us to get another leg up from here."

Providing support to the market was a report showing jobless claims unexpectedly fell last week, underscoring a firming in the labor market. That followed Friday's report of a better-than-expected rise in the number of jobs created in January.

Apple's stock rose to an all-time high. Brokerages Canaccord Genuity said its checks indicated very strong iPhone 4S sales and increased its price target to $665. Website AllThingsD said Apple would introduce its latest iPad tablet version next month.

But Cisco Systems Inc limited gains by the tech sector as the network equipment maker's forecast failed to impress investors.

Taleo Corp surged after Oracle Corp said it would buy the recruitment software maker for about $1.9 billion.

PepsiCo Inc fell after the beverage maker forecast lower-than-expected 2012 earnings, said it would cut thousands of jobs and increase advertising to reinvigorate sales in North America.

Groupon Inc slumped. The daily deal website posted an unexpected loss in the first quarterly report since it went public.

Diamond Foods Inc tumbled after the company removed its top management and said it would restate results due to improper accounting of payments to walnut growers.

Reuters contributed to this report.