|Page (1) of 1 - 09/07/11||email article||print page|
Stocks rise in US, Europe on relief over German court ruling upholding European bailout fund
NEW YORK (AP) ' U.S. stocks rallied for the first time in three days Wednesday after a German court backed the country's role in bailing out other European countries. The ruling renewed hopes that Europe will find a solution to its long-running debt problems.
At noon, the Dow Jones industrial average was up 175 points, or 1.6 percent, to 11,314. The Dow and other U.S. indexes fell over the previous three days on worries about Europe's debt woes and weakness in the U.S. jobs market. Verizon and McDonald's were the only two of the 30 Dow stocks to fall.
"The market has been pricing in an out-and-out recession, so any hints that policy issues might be solved is a plus," said Brian Gendreau, market strategist at Cetera Financial Group
The Standard and Poor's 500 index rose 23, or 2 percent, to 1,188. All 10 company groups that make up the S&P index rose. The Nasdaq composite rose 51, or 2.1 percent, to 2,525.
European indexes rose broadly after the German court ruling eased fears that Europe's bailouts of Greece and Ireland could be stalling. Germany's DAX index surged 4.1 percent; France's CAC-40 jumped 3.6 percent.
The ruling also pushed the prices of Treasury securities lower as investors were more willing to hold risky assets like stocks. Treasury prices have been rising over the past week, sending their yields lower, as demand for lower-risk investments increased.
The yield on the 10-year Treasury note rose to 2.04 percent. It traded at 1.97 percent late Tuesday, one of the lowest rates since the Federal Reserve Bank of St. Louis began keeping daily records in 1962. Gold, another traditional safe haven, fell $56, or 3 percent, to $1,817 an ounce. It closed at $1,891 on Aug. 22.
Yahoo and Bank of America rose sharply after announcing the departures of key executives after the market closed Tuesday. Yahoo gained 4 percent, to $13.45, after announcing that CEO Carol Bartz had been fired. Some analysts said the move made the company a takeover target. Bartz spent nearly three years steering the company.
Bank of America jumped 5 percent, to $7.37, after the bank said two top officers will leave. The changes were seen as one of chief executive Brian Moynihan's most dramatic moves to reshape the embattled bank. Bank of America shares have fallen 48 percent this year through Tuesday, compared with a 7 percent drop in the S&P 500 index.
Financial companies were the top performing group in the S&P 500 index. JP Morgan Chase & Co., Goldman Sachs and Wells Fargo each rose more than 2 percent.
Urban Outfitters fell 3 percent, to $25.14, after the retailer said its sales were slipping in the current quarter. Computer graphics company Nvidia Corp. jumped 8 percent, to $14.22, after the company said it expects its revenues to be higher than Wall Street analysts forecast.
The Federal Reserve will release its snapshot of regional business conditions at 2 p.m. The Fed's last survey was the weakest this year. Growth slowed in eight of the regions in June and July, bolstering concerns that the U.S. economy was headed back into another recession.