Home > Market News > Europe, housing drive markets

Europe, housing drive markets

Dow jumps more than 300 points on positive news.

NEW YORK — Encouraging signs out of Europe and a surprisingly strong report on the U.S. housing market drove the Dow Jones industrial average up more than 300 points Tuesday. It was the best day for stocks this month.

The Spanish government pulled off a successful debt auction and gauges of business and consumer confidence in Germany rose unexpectedly. Both helped ease worries about Europe’s debt crisis. The dollar fell against the euro and U.S. government bond prices dropped as traders shifted money out of the safest assets.

Borrowing costs for the Spanish government plunged at an auction of short-term debt, a sign that investors are becoming more confident in the country’s ability to pay.

“Spain has plenty of problems, large debts and budget deficits,” said Sam Stovall, chief equity strategist at S&P Capital IQ. “So when we see debt auctions go much better than expected it’s very encouraging.”

The Dow gained 337.32 points, or 2.9 percent to close at 12,103.58.

The gains held on Tuesday afternoon even after the U.S. House of Representatives rejected a plan to extend a cut in Social Security taxes. Unemployment benefits for 2 million people are also at risk.

A Federal Reserve proposal for stricter rules on larger banks didn’t knock down JPMorgan Chase, Citigroup and other big bank stocks. JPMorgan Chase & Co. gained 4.9 percent. Citigroup added 4.6 percent.

The Standard & Poor’s 500 index gained 35.95 points, or 3 percent, to 1,241.30. Only six stocks in the index fell. The Nasdaq composite index rose 80.59, or 3.2 percent, to 2,603.73.

Analysts cautioned that recent big rallies in the stock market have been quick to fade. “If you’re selling into rallies, it means people want out,” said Quincy Krosby, Prudential Financial’s market strategist. “They don’t believe it’s sustainable.”

Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: