By Jonathan Cheng
U.S. stocks soared as investors celebrated good news from Europe and found solace from the latest domestic economic numbers.
The Dow Jones Industrial Average soared 239 points, or 2.2%, to 11244 in midday trading, while the Standard & Poor's 500-stock index gained 25 points to 1205, and the Nasdaq Composite added 55 points to 2553.
The early increase helped to wipe out November's sluggish performance, which saw the Dow finish 1% lower.
The advances were broad and deep, with all 30 of the Dow's component stocks, all 10 of the S&P 500's sectors and all but 12 of its 500 stocks, all trading in positive territory.
The rally began early, but got an extra boost around noon after Reuters reported the U.S. would commit more money to the International Monetary Fund to help with a broader stabilization package for Europe. That news sent stocks racing higher and pushed the euro 1.2% higher on the day to trade at $1.3140, from $1.2981 late Tuesday.
"Obviously the news from Europe is very good—everyone understands that they will monetize the debt and the U.S. will help them with that...this is good news," said Sal Arnuk, co-head of equity trading at Chatham, N.J., brokerage Themis Trading LLC, who described the move as strong, consolidating and continuing to move upwards.
Mr. Arnuk also pointed to fresh money from some mutual funds whose new fiscal year begins today.
Also helping the markets were data showing the U.S. added 93,000 private-sector jobs in November—the 10th consecutive month of gains and the largest one-month gain in three years. The survey's compilers said the report showed "an acceleration of employment and suggests the nation's employment situation is brightening somewhat."
Separate data from the Labor Department showed productivity rising more than previously thought in the third quarter, as companies boosted output while also holding down labor costs. U.S. spending on construction projects also unexpectedly rose by 0.7% in October, for a second straight gain. Manufacturing numbers largely fell in line with expectations.
"There's a growing recognition that the economy may not be in anywhere as bad shape as people thought," said Brian Gendreau, market strategist with Financial Network, a financial-advisory firm. "We were talking about a double dip just two months ago when the news was mixed, but now the news isn't even mixed, and I think the market is pricing that in accordingly."
Mr. Gendreau warned, however, that Europe continued to be a major source of concern. "The macro situation is going to dominate the market for some time," he said.
Asian and European economic data also helped the bulls' cause. A British manufacturing survey registered its highest reading in 16 years and Germany's retail sales jumped higher than expected in October, helping the Stoxx Europe 600 index finish 2% higher. Meanwhile, in China, two separate gauges of manufacturing activity posted increases in November.
U.S. investors were also keeping a close eye on Congress and the Federal Reserve, which is set to release its Beige Book of economic activity at 2 p.m. EST.
On the corporate front, shares of State Street gained 3.9% after the firm said late Tuesday it would lay off 1,400 employees, or about 5% of its work force, as part of a long-term restructuring plan.
Bank of America recouped some of their losses a day after fears of the potential impact of leaked documents about the bank sent shares down 3.2%. Shares were up 1%.
Google gained 2.1% as the tech giant moved toward making its biggest-ever acquisition, discussing a deal for Groupon, according to The Wall Street Journal.
Starbucks gained 4% as the coffee chain said it would more than triple the number of stores it has in mainland China to more than 1,500 within the next five years, which would make China the Seattle company's second-largest market outside the U.S.
Car makers General Motors and Ford Motor rose 1.9% and 3.3%, respectively. GM reported U.S. sales growing by 11% in November compared to the same month a year ago, putting the auto maker on track to gain market share this year. Ford, meanwhile, said its November sales were up 24%, with gains across their full vehicle portfolio.
Energy stocks also surged to lead the S&P 500's sectors as oil prices jumped 2.7%. Baker Hughes advanced 3.9% while Halliburton gained 4.1%.
Transportation players also surged, with the Dow Jones Transportation Average gaining 2.8% on the back of FedEx's 4.2% increase and CSX's 3.4% advance.
U.S.-listed shares of Spanish banking giant Banco Bilbao Vizcaya Argentaria soared 9.6% as stocks in Spain rallied.
Commodity prices gained, while the dollar declined. The U.S. Dollar Index, which tracks the performance of the greenback against a basket of six other currencies, dropped 0.7%, sinking after the reports of possible U.S. involvement in the European bailout.
Treasurys also fell, sending the yield on the benchmark 10-year note higher to 2.927%. Gold edged up to $1,392 an ounce.
Write to Jonathan Cheng at jonathan.cheng@dowjones.com
No comments:
Post a Comment