By Tanya Agrawal
(Reuters) - U.S. stocks were higher in afternoon trading on Wednesday after a Bloomberg report that Germany may be satisfied with Greece committing to at least one economic reform in return for aid.
All three major indexes rose more than 1 percent on the same day for the first time in a month.
The blue-chip Dow Industrial Average opened higher after four days of declines. The Nasdaq Composite snapped a four-day losing streak, rising the most in a month, while the S&P was positive for the second day in a row.
The German government may settle for a clear commitment by Greece to a measure up front to unlock aid, Bloomberg reported, citing two people familiar with Germany's position. (http://bloom.bg/1BYRRg4)
A German spokesman told Reuters that Germany would support a Greek debt deal only if it had the approval of the three lending institutions.
"Optics matter a great deal particularly with regards to Greece," said Peter Kenny, chief market strategist at Clearpool Group in New York.
"Any sense the talks have the potential to find some sort of middle ground is a very constructive narrative for equities."
U.S. and European stocks have been under pressure as investors expect the U.S. Federal Reserve to raise rates sooner rather than later.
The Fed has said it will raise rates only if data points to a recovery in the U.S. economy, which had come to a standstill in the first quarter.
Applications for U.S. home mortgages rose last week, while interest rates hit their highest level since November 2014, data released on Wednesday showed.
"I think we will see a nominal hate hike in September because the Fed is eager to get the normalization process started," said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute in St. Louis, Missouri.
The U.S. dollar index hit a three-week low, with analysts pointing to debate around the G7 summit regarding the speed of the dollar's rise as the U.S. prepares to end years of cheap central-bank cash.
At 13:11 p.m. ET (1711 GMT) the Dow Jones industrial average was up 255.14 points, or 1.44 percent, at 18,019.18, the S&P 500 was up 26.69 points, or 1.28 percent, at 2,106.84 and the Nasdaq Composite was up 68.70 points, or 1.37 percent, at 5,082.56.
All the 10 major S&P 500 sectors were higher, with the technology index, leading the gainers with a 1.69 percent rise. Energy and Financial stocks were also higher, with the prospect of higher interest rates boosting financial stocks.
Microsoft's 2.3 percent increase provided the biggest boost to the S&P and the Nasdaq, while Goldman Sachs's 1.9 percent rise was the biggest driver on Dow.
HCC Insurance Holdings shares rose 36.2 percent to $77.22 after Tokio Marine Holdings said it had agreed to buy U.S. specialty insurer for $7.5 billion.
Netflix was up 5.4 percent at $681.85 - a new record-high - a day after shareholders approved a massive increase in the number of shares the company is authorized to issue, the first step toward a possible stock split.
Advancing issues outnumbered decliners on the NYSE by 2,351 to 659. On the Nasdaq, 2,095 issues rose and 623 fell.
Thirty two stocks on the S&P 500 index hit a 52-week high and four a 52-week low. The Nasdaq recorded 152 highs and 27 lows.
(Additional reporting by Sinead Carew; Editing by Saumyadeb Chakrabarty)
