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Euro zone progress extends Wall St advance

Euro zone progress extends Wall St advance
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First Published: Fri, Sep 16 2011. 11 28 AM IST
Updated: Fri, Sep 16 2011. 11 28 AM IST
New York: US stocks rose for a fourth day on Thursday as coordinated central bank action calmed fears that Europe’s financial sector was headed for a credit freeze due to the region’s sovereign debt crisis.
Financial shares rallied after the European Central Bank announced plans, in coordination with other major central banks, to make it easier for euro zone institutions to borrow dollars.
Major stock indices rose more than 1%. Shares of banks, among the hardest hit by the debt worries, outperformed other sectors.
The S&P financial index jumped 2.6% and the S&P industrial index rose 1.9%. Bank of America gained 4% to $7.33 while conglomerate General Electric advanced 2.8% to $16.08.
“The bottom line is the EU and the IMF and the industrial nations are trying to convince the market that the euro is here to stay, euro land is not going to disintegrate and Greece is probably going to avoid a default,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
While the S&P 500 index is still down 10% since 22 July, the broad gauge has managed a 4.8% gain so far this week and is on track for its best weekly%age gain since the start of July.
Worries about a Greek default have plagued the stock market for weeks. The central bank action was the latest sign this week that Europe’s political and economic leaders were stepping up their commitment to contain the crisis.
The Dow Jones industrial average was up 186.45 points, or 1.66%, at 11,433.18. The Standard & Poor’s 500 Index was up 20.43 points, or 1.72%, at 1,209.11. The Nasdaq Composite Index was up 34.52 points, or 1.34%, at 2,607.07.
Advancers led decliners by more than 3 to 1 on the New York Stock Exchange and by 2 to 1 on Nasdaq.
Volume was 7.5 billion shares on the NYSE, Amex and Nasdaq, just below last year’s average of roughly 7.6 billion.
Optimism over containing the debt crisis offset the impact of disappointing U.S. economic data.
New weekly US jobless claims hit their highest level since late June and a gauge of New York state factory activity contracted in September.
Another report showed manufacturing activity in the Mid-Atlantic region contracted for a second month in a row.
Among declining stocks, Netflix Inc slumped 18.9% to $169.25 after it cut its third-quarter subscriber outlook, citing a price increase that spurred customers to shy away from its DVD-only service.
US-traded shares of UBS AG shed 10% to $11.41 after the company said a trader who lost the Swiss bank around $2 billion in unauthorised deals had been arrested in London.
After the closing bell, shares of Research In Motion dropped 10.8% to $26.35 as it reported quarterly results.
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First Published: Fri, Sep 16 2011. 11 28 AM IST
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