Fading worries lift US stocks

Greece’s debt and a handful of corporate takeovers raised expectations for the economy.

The Dow Jones industrial average climbed 20 points to move back above the psychological level of 11,000 and the Standard & Poor’s 500 index neared 1,200.

A loan agreement for Greece also allowed U.S. investors to turn their focus to a busy week of economic and corporate earnings reports.

European leaders agreed over the weekend to make loans available to Greece to help the country ease its public debt burden. The 16 countries that use the euro agreed to provide $40.5 billion in loans to Greece if needed. The International Monetary Fund (IMF) could contribute another $13.5 billion.

The loans would carry interest rates below what private lenders had been demanding in recent days to hold Greek debt. Traders had been worried Greece would default on its loans.

The details help calm worries that have been one of the few drags on stocks. There has been concerns in recent months that mounting debt in Greece and other European nations like Spain and Portugal would stunt an economic recovery in Europe and undermine Europe’s shared currency,the euro.

“This is clearly a positive development that the EU is identifying and dealing with what has really been it’s first real challenge,” said Alan Gayle,senior investment strategist for RidgeWorth Investments.

Meanwhile,the latest round of corporate dealmaking signaled more confidence in the recovery among business leaders.

Mirant Corp. agreed to acquire rival power company Reliant Energy Inc. for $1.61 billion,while the private equity firm Cerberus Capital Management is buying DynCorp International,a provider of support services to U.S. national security operations,for $1 billion.

In midday trading,the Dow rose 21.69,or 0.2 percent,to 11,019.04. The S&P 500 index rose 2.92,or 0.2 percent,to 1,197.29,while the Nasdaq composite index rose 3.50,or 0.1 percent,to 2,457.55.

Bond prices rose. The yield on the benchmark 10-year Treasury note fell to 3.85 percent from 3.88 percent late Friday.

The Dow is coming off its sixth straight weekly gain and is at its highest level in 18 months. The Dow climbed above 11,000 for the first time since September 2008 in the final moments of trading Friday before ending the session just below that threshold. Easing concerns about Greece’s debt problems on Friday helped push shares higher.

Dow component Alcoa Inc. opens earnings season after the market closes Monday. Intel Corp.,JPMorgan Chase & Co.,Bank of America Corp.,Google Inc. and General Electric Co. all also report earnings this week.

Reports on inflation,retail sales,manufacturing and housing will be released throughout the week. Stocks have been rising steadily in recent months as reports show steady but slow economic growth.

Among stocks,Mirant rose $2.02,or 18.8 percent,to $12.75,while RRI rose 56 cents,or 14.2 percent,to $4.51. DynCorp rose $5.71,or 48.6 percent,to $17.46.

Alcoa rose 29 cents,or 2 percent,to $14.68. The Russell 2000 index of smaller companies rose 1.49,or 0.2 percent,to 704.44.

Four stocks rose for every three that fell on the New York Stock Exchange,where volume came to 355.1 million shares,compared with 411.7 million shares traded at the same point Friday.