New York: US stocks jumped on Thursday on expectations of a resolution of Ireland’s banking crisis, but the S&P 500’s inability to break through resistance suggests stocks could be in a tight range through the end of the year.
General Motors Co’s shares gained 3.6% in its return to public trading and accounted for about 5.1% of regular session volume, according to Thomson Reuters data.
However, given how much Ireland’s financial woes hampered stocks in recent days, GM’s success was a side note to the rescue of another troubled European country’s finances..
US-listed shares of the Bank of Ireland climbed 33.3% to $2.88.
Despite the bullish sentiment, the S&P 500 hovered around 1,200 for most of the session but failed to hold above the key level. This could mean the index’s trading range will remain tight for the rest of the year.
“There’s a lot of selling pressure at the 1,200 level, there’s buying pressure at 1,150 and we’re in a tight range until further notice,” said Joe Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.
Piercing the 1,200 level would leave the S&P 500 facing hefty technical resistance near 1,228, the highest it has been in more than two years.
Reflecting less market uncertainty, the CBOE Volatility index fell 13.8%, its largest percentage daily drop in more than 5 months.
The Dow Jones industrial average gained 173.35 points, or 1.57%, to 11,181.23. The Standard & Poor’s 500 rose 18.10 points, or 1.54%, to 1,196.69. The Nasdaq Composite added 38.39 points, or 1.55%, to 2,514.40.
GM shares shot up as much as 9.06% as investors bet the US automaker can make a sustained recovery as it returned to the market after a blockbuster IPO. The stock closed up 3.6% at $34.19.
The S&P Industrials index rose 1.8% as GM’s advance boosted shares of other automakers and auto suppliers.
“This morning we had the big push from GM and the enthusiasm that creates,” Battipaglia said.
The S&P materials sector added 1.9% and the energy sector gained 2.2% as expectations of the Irish bailout strengthened the euro against the US dollar, boosting commodity prices and shares in related sectors.
Aluminum producer Alcoa Inc was the top percentage gainer in the Dow industrials, up 3.4% to $13.38.
After the closing bell and adding to the upbeat sentiment, Dell Inc pointed to strong demand from large corporations as key for its quarterly margins and profit landing above Wall Street expectations.
Dell shares shot up 6.6% to $14.56 in extended trading after a gain of 2.4% during regular hours.
Earlier on Thursday, data showed US weekly applications for unemployment insurance hit a two-year low last week and factory activity in the country’s mid-Atlantic region accelerated in November, suggesting the economy’s recovery was gaining speed..
About 8.34 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below the year-to-date average of 8.70 billion.
Advancing stocks outnumbered declining ones on the NYSE by more than 4 to 1, while on the Nasdaq about three stocks rose for every share that fell.