Related News
Stocks rise on help for European banks; Dow up 183
Source: Agencies |
October 7, 2011, Friday
|
Online Edition
Online Edition
THE Dow Jones industrial average jumped 183 points yesterday after the European Central Bank moved to support that region's lenders and US retailers reported stronger September sales.
It was the third straight day of gains. The Dow has soared 468 points since Tuesday, or 4.4 percent.
The European Central Bank promised to provide unlimited one-year loans to the region's lenders through 2013. The goal is to shield banks from poorly functioning short-term credit markets, in which banks are becoming too worried about each other's financial stability to lend money to one another. Germany's DAX jumped 3.2 percent, and France's CAC-40 rose 3.4 percent.
The loans are also meant to help protect the banks in the event Greece's government defaults on its debt. If that happens the value of Greek bonds held by those banks would be likely to drop sharply, weakening the banks' balance sheets and making it harder for them to lend.
The European Central Bank disappointed some investors by announcing that it would keep interest rates unchanged. Analysts were hoping the bank would cut rates to encourage lending and give a boost to Europe's sagging economy.
Target Corp., Nordstrom Inc., Macy's Inc. and other US retailers reported sales that beat Wall Street's expectations. While some of the sales were driven by deep discounts, analysts said the higher sales suggested the US economy was not in another recession.
"The market has been pricing in an out-and-out recession, but the fact that consumer spending is holding up shows that we're more likely to continue muddling through at a 1 to 2 percent growth rate," said Brian Gendreau, market strategist at Cetera Financial Group.
The Dow Jones industrial average jumped 183.38 points, or 1.7 percent, to 11,123.33. It was the first time the Dow rose by more than 100 points for three straight days since a three-day rally that began Aug. 11 and ended with a 763-point gain.
It was the 9th straight day the Dow closed up or down more than 100 points, the longest such streak since November 2008, in the middle of the financial crisis. Markets have been extraordinarily volatile as investors react to the latest headlines out of Europe.
The S&P 500 rose 20.94, or 1.8 percent, to 1,164.97. The Nasdaq composite rose 46.31, or 1.9 percent, to 2,506.82.
Banks in Europe and the US rallied. US bank stocks rose sharply after Treasury Secretary Timothy Geithner told a Congressional panel that US financial firms had a "very modest" exposure to Europe's debt problems. Bank of America Corp. jumped 8.9 percent to US$6.28, the biggest gain among the 30 stocks in the Dow. Morgan Stanley rose 4.8 percent to US$15.18.
The Labor Department said the number of applications for unemployment benefits rose slightly last month to 401,000. While that is a signal that the job market continues to be weak, the increase was slightly less than what Wall Street economists had predicted, a signs that layoffs are easing. Unemployment benefits typically need to fall below 375,000 to signal job growth.
The hopeful signs on the US economy led investors to pull money out of lower-risk assets. That pushed yields higher on US government debt as investors sold Treasurys. The yield on the 10-year Treasury note rose to 1.99 percent from 1.90 percent late Wednesday.
Corning Inc. rose 7.1 percent to US$13.50 after it said it would increase its dividend and buy back shares. Apple Inc. lost 0.2 percent to US$377.37 in choppy trading after company co-founder and former CEO Steve Jobs died Wednesday. Several analysts and large investors said they believe the company would continue to grow under new CEO Tim Cook.
It was the third straight day of gains. The Dow has soared 468 points since Tuesday, or 4.4 percent.
The European Central Bank promised to provide unlimited one-year loans to the region's lenders through 2013. The goal is to shield banks from poorly functioning short-term credit markets, in which banks are becoming too worried about each other's financial stability to lend money to one another. Germany's DAX jumped 3.2 percent, and France's CAC-40 rose 3.4 percent.
The loans are also meant to help protect the banks in the event Greece's government defaults on its debt. If that happens the value of Greek bonds held by those banks would be likely to drop sharply, weakening the banks' balance sheets and making it harder for them to lend.
The European Central Bank disappointed some investors by announcing that it would keep interest rates unchanged. Analysts were hoping the bank would cut rates to encourage lending and give a boost to Europe's sagging economy.
Target Corp., Nordstrom Inc., Macy's Inc. and other US retailers reported sales that beat Wall Street's expectations. While some of the sales were driven by deep discounts, analysts said the higher sales suggested the US economy was not in another recession.
"The market has been pricing in an out-and-out recession, but the fact that consumer spending is holding up shows that we're more likely to continue muddling through at a 1 to 2 percent growth rate," said Brian Gendreau, market strategist at Cetera Financial Group.
The Dow Jones industrial average jumped 183.38 points, or 1.7 percent, to 11,123.33. It was the first time the Dow rose by more than 100 points for three straight days since a three-day rally that began Aug. 11 and ended with a 763-point gain.
It was the 9th straight day the Dow closed up or down more than 100 points, the longest such streak since November 2008, in the middle of the financial crisis. Markets have been extraordinarily volatile as investors react to the latest headlines out of Europe.
The S&P 500 rose 20.94, or 1.8 percent, to 1,164.97. The Nasdaq composite rose 46.31, or 1.9 percent, to 2,506.82.
Banks in Europe and the US rallied. US bank stocks rose sharply after Treasury Secretary Timothy Geithner told a Congressional panel that US financial firms had a "very modest" exposure to Europe's debt problems. Bank of America Corp. jumped 8.9 percent to US$6.28, the biggest gain among the 30 stocks in the Dow. Morgan Stanley rose 4.8 percent to US$15.18.
The Labor Department said the number of applications for unemployment benefits rose slightly last month to 401,000. While that is a signal that the job market continues to be weak, the increase was slightly less than what Wall Street economists had predicted, a signs that layoffs are easing. Unemployment benefits typically need to fall below 375,000 to signal job growth.
The hopeful signs on the US economy led investors to pull money out of lower-risk assets. That pushed yields higher on US government debt as investors sold Treasurys. The yield on the 10-year Treasury note rose to 1.99 percent from 1.90 percent late Wednesday.
Corning Inc. rose 7.1 percent to US$13.50 after it said it would increase its dividend and buy back shares. Apple Inc. lost 0.2 percent to US$377.37 in choppy trading after company co-founder and former CEO Steve Jobs died Wednesday. Several analysts and large investors said they believe the company would continue to grow under new CEO Tim Cook.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
