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US stock indexes rise on optimism over talks in Europe to avoid a default by Greece
NEW YORK (AP) ' Stock indexes rose in another bumpy trading day Wednesday as optimism grew about talks in Europe on containing that region's debt crisis.
The Dow Jones industrial average rose 113 points, or 1 percent, to 11,219 at 2 p.m. It had been down as many as 112 points within an hour after the opening bell.
The leaders of Greece, France and Germany conferred by teleconference to seek ways of avoiding a default by Greece. European stock indexes rose as investors hoped the talks would be productive. Germany's DAX rose 3.4 percent and France's CAC-40 1.9 percent.
The Greek government was expected to issue a statement on the talks later Wednesday about the talks. The threat of a default and the damage it could wreak on financial markets has had investors on edge for weeks.
Concerns over Europe have been driving markets lower in the past two weeks, lifting Treasurys and weighing on stocks. The yield on the 10-year Treasury note hit a record low on Monday of 1.87 percent and the S&P 500 has only risen three days this month.
"It's an overreaction," said Uri Landesman, president of the New York hedge fund Platinum Partners. Landesmann thinks Germany, France and other European countries won't let a Greek default create a larger financial crisis. "They're just not going to let them go under," he said. "That's just not happening. I think people have learned the lesson from letting Lehman Brothers fail."
German Chancellor Angela Merkel distanced herself from comments this week by her vice chancellor and others who suggested a Greek bankruptcy was possible. The finance ministers from the 17 nation-bloc that uses the euro currency will meet on Friday in Poland.
The Standard & Poor's 500 index rose 11 points, or 0.9 percent, to 1,183. All 10 industry groups in the index rose, led by industrial stocks.
The Nasdaq composite rose 29, or 1.1 percent, to 2,561.
The gains came despite a report that retail sales were flat in August. People spent less on autos, clothing and furniture as fears mounted that the country was slipping into a recession and as the stock market took a steep fall. Economists had expected a slight gain.
The report helped push oil prices down $1.12 to $89.08 a barrel. Weak retail spending suggests Americans will consume less fuel.
ConAgra Foods Inc. said it would withdraw its $5.17 billion bid for Ralcorp Holdings Inc. if the company doesn't consider its bid by Monday evening. Ralcorp has already rejected several bids from ConAgra since March. Ralcorp's stock dropped 8 percent to $77.80. ConAgra fell 2 percent to $23.45.
Computer maker Dell Inc. rose 2 percent to $14.70. Dell said Tuesday it will add $5 billion to its existing $2.1 billion stock-buyback plan. Dell bought $1.1 billion of its stock in the second quarter.
Staples Inc. rose 5 percent to $14.84 after the company said it will buy up to $1.5 billion of its own stock. The office-supply company's stock has dropped 35 percent this year.
General Electric Co. and other industrial companies led stocks higher on Tuesday, the second day of gains in a row. It was the first back-to-back gain since late August. Since then the Dow has lost 4.2 percent, the S&P 3.5 percent. The tech-heavy Nasdaq has fared better, losing 1 percent.