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Angela Merkel

Dow up on never-say-die Greek deal hopes

Jane Onyanga-Omara
USA TODAY
Specialists and traders work on the floor of the New York Stock Exchange.

U.S. and European stocks surged Wednesday after a leaked letter from Greece's government to eurozone officials appeared to show that maneuver-prone Athens is ready to concede to creditor demands over new bailout terms.

The Dow Jones industrial average ended up 138 points, or 0.8%, to 17,757.91.

For the blue chips, it's still a down year -- the index turned red for 2015 on Monday and is 65 below break-even for the year.

The Standard & Poor's 500 index gained 0.7%, while the Nasdaq composite index added 0.5%.

Although it was not clear if the concessions would be significant enough to bring the two sides, at loggerheads for months, together for a last-minute deal.

And German Chancellor Angela Merkel also appeared to rule out any agreement on a new aid program for Greece before a referendum there planned for Sunday.

European markets jumped even higher: Germany's DAX index was up 2.2% and the CAC 40 in Paris advanced 1.9%. Britain's FTSE 100 index gained 1.4%.

STOCKS:Live markets blog

Encouraging U.S. economic data also helped boost stocks.

• In an encouraging sing for the labor market, private employers added 237,000 jobs in June, according to payroll processor ADP. That beat forecasts of a 220,000 gain and raised hopes for a strong June employment report due to be released Thursday.

• Manufacturing activity increased in June as an index of factory activity rose to 53.5 from 52.8 in May, according to the Institute for Supply Management.

Markets have been on edge all week as the Greek debt crisis worsened and back-and-forth negotiations dragged on. Eurozone finance ministers are weighing Greece's latest proposal after the country failed to make a $1.8 billion debt payment to the International Monetary Fund due Tuesday. Investors worry that Greece could be forced to eventually drop out of the euro currency if no deal is reached.

Greece is due to hold a national referendum on Sunday on the measures demanded by its international creditors in return for a new aid package.

In Asia, Japan's Nikkei 225 index rose 0.5% to close at 20,329.32 and the Shanghai Composite, which has seen wild swings over the past few days, plunged 5.2%. Markets in Hong Kong were closed for a holiday.

Stocks ended slightly up Tuesday as the Dow recovered from its biggest drop in two years amid growing chaos surrounding the Greek debt crisis.

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