US stocks lifted by progress on Greece (AFP)

NEW YORK (AFP) – US stocks rallied as markets opened Thursday amid signs that Athens would implement a painful austerity plan and that German banks would join a rescue effort to prevent a Greek default.

The Dow Jones Industrial average gained 99.48 points (0.81 percent) to stand at 12,360.90 in the first half-hour of trading.

The broader S&P 500 rose 8.21 points (0.63 percent) to 1,315.62, while the tech-heavy Nasdaq Composite climbed 20.50 points (0.75 percent) to 2,760.99.

Traders were keeping a close eye on Greece, where lawmakers secured enough votes to pass a bill implementing a painful 28-billion-euro ($41-billion) austerity plan demanded by international creditors.

Further fueling hopes that Europe would defuse its debt crisis, the German government announced that German banks had agreed to participate in a second rescue package for Athens by rolling over some of their Greek bonds.

"Greece appears to be on course to receive a second bailout package," said Patrick O'Hare of Briefing.com.

In the United States, government data showed continued economic weakness, with a report showing that 428,000 people had filed new jobless claims in the week ending June 29, only a slight dip from 429,000 a week earlier.

Shares of Hewlett-Packard gained 3.0 percent as the tech giant prepared to release its TouchPad, a tablet computer designed to compete with Apple's dominant iPad.

Bond prices were mixed. The yield on the 10-year US Treasury note dipped to 3.10 percent from 3.11 percent on Wednesday, while that on the 30-year bond edged up to 4.38 percent from 4.37 percent.

Bond prices and yields move in opposite directions.