Stocks: Dow skyrockets, Nasdaq up 3% as Europe talks unity - USA TODAY
NEW YORK (AP) – U.S. stocks leapt early Friday after European leaders agreed to a set of prescriptions for their debt crisis.
Richard Drew, AP
Trading specialist Edward Zelles works on the floor of the New York Stock Exchange on June 28, 2012.
Sponsored Links
Leaders in Brussels unveiled a plan to bail out banks directly from a regional bailout fund. They said they would ease austerity measures that are causing political unrest and agonizing recessions in Greece and other nations that have received bailouts.
Fear about Europe has weighed on markets in recent weeks. Signs of improvement there tend to spark broad, if temporary, rallies.
The Dow Jones industrial average rose more than 200 points in the first 30 minutes of trading. The broader Standard & Poor's 500 index and the Nasdaq composite index were also up sharply.
The news out of Brussels also lifted energy prices, on the theory that a cure to Europe's debt woes will remove one of the major drags on global growth. Benchmark oil jumped 5%, or $3.87, to $81.56 a barrel on the New York Mercantile Exchange, a day after hitting an eight-month low.
The two-day summit in Brussels is the 19th meeting for European leaders since the debt crisis emerged, and leaders have repeatedly clashed over how best to address it. European Council President Herman Van Rompuy called Friday's agreement a "breakthrough."
Stock trend
http://chart.bigcharts.com/custom/us...s=1&mocktick=1
Dow Jones industrial average, five trading days
Consensus in Europe was reached after borrowing rates in Spain — where unemployment is approaching 25% — and Italy hit unsustainable levels. The fear was that the weaker economies of Europe would drag the entire continent into recession, or worse.
Stocks around the world surged Friday, with markets in countries on the front line of the crisis doing particularly well. Italy's FTSE MIB and Spain's IBEX indexes each rose more than 4%.
Perhaps more importantly, the yield on Spain's 10-year bond dropped by 0.32 percentage points to 6.58%. Italy's was down by 0.14 percentage points to 5.94%. Both countries have seen their rates edge toward the 7% level which is seen as unsustainable over the long term.
The developments overshadowed more unappetizing signals about the U.S. economy.
Americans were more leery of spending in May as they saw dismal gains in income, suggesting that a slow jobs recovery is sowing doubts about an economic rebound at home.
The Commerce Department reported Friday that consumer spending showed no gain in May, the weakest figure since spending was unchanged in November. Income growth edged up 0.2%, matching the modest April increase.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to [email protected]. Include name, phone number, city and state for verification. To view our corrections, go to corrections.usatoday.com.
USA TODAY is now using Facebook Comments on our stories and blog posts to provide an enhanced user experience. To post a comment, log into Facebook and then "Add" your comment. To report spam or abuse, click the "X" in the upper right corner of the comment box. To find out more, read the FAQ and Conversation Guidelines.
http://pixel.quantserve.com/pixel/p-89EKCgBk8MZdE.gif
