Fourth straight day of wins on Wall St
INVESTORS pushed US stocks higher for a fourth day yesterday as coordinated central bank action encouraged optimism about dealing with the Eurozone debt crisis and its threat to the global recovery.
Major stock indices rose more than one per cent. Shares of financial companies, which have been among the hardest hit by the debt worries, outperformed other sectors.
The S&P financial index and the S&P industrial index each rose 1.8 per cent.
Shares of Bank of America rose four per cent to $7.32. General Electric gained three per cent to $16.09.
The European Central Bank, along with other major central banks, will reintroduce three-month dollar liquidity operations in the fourth quarter.
The move benefited the European banking system, which experienced new stress in finding dollar funds due to nervousness by lenders.
“The bottom line is the EU and the IMF and the industrialised 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.
The Dow Jones industrial average was up 149.21 points, or 1.33 per cent, at 11,395.94. The Standard & Poor’s 500 Index was up 15.81 points, or 1.33 per cent, at 1,204.49. The Nasdaq Composite Index was up 28.38 points, or 1.10 per cent, at 2,600.93.
Worries about a Greek default have plagued the stock market for weeks.
While the S&P 500 index is still down 10 per cent since 22 July, the broad gauge has managed a 4.3 percent gain so far this week.
Advancers were leading decliners by about three to one on the New York Stock Exchange.
Optimism over containing the debt crisis came even as German Chancellor Angela Merkel rejected the idea of Eurozone bonds as a solution.
A top official said he expects lenders to recommend the release of a vital next tranche of aid to Greece, warding off the threat of an imminent default.
Gold fell two per cent to three-week lows, as increasing efforts to contain the European debt crisis fueled another volatile session, further diminishing bullion’s appeal as a safe haven. Prices slid below $1,800 an ounce.