US Blue-Chip Stocks Rise; Investors Eye EU Summit Later This Week

Date : 12/06/2011 @ 5:17PM
Source : Dow Jones News
Stock : Clearwire Corp. - Class A (MM) (CLWR)
Quote : 4.99  0.0 (0.00%) @ 2:05AM

US Blue-Chip Stocks Rise; Investors Eye EU Summit Later This Week

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The Dow industrials closed higher following reports of two separate rescue funds that could bolster efforts to stem Europe's sovereign-debt crisis.

The Dow Jones Industrial Average advanced 52.30 points, or 0.4%, to 12150.13, its fifth gain out of the last seven sessions. The Standard & Poor's 500-stock index gained 1.39 points, or 0.1%, to 1258.47. The Nasdaq Composite edged down 6.20 points, or 0.2%, to 2649.56, snapping a four-day streak of gains.

Stocks spent much of the day in a narrow trading range. But the market got an afternoon jolt after the Financial Times reported European officials are in negotiations to implement two separate bailout funds. The proposals would nearly double the firepower of the region's financial-rescue system and help stem the sovereign-debt crisis.

The Dow jumped as much as 118 points during the final trading hour before ending off session highs.

"One headline can still really move the market dramatically," said Steve Sosnick, equity risk manager at Timber Hill/Interactive Brokers Group. "The difference is the headline [today] is being read with a glass half-full mentality. Psychology has changed, but the skittishness of the market has not."

3M paced the Dow's gains, rising $1.20, or 1.5%, to $82.13, after the company forecast earnings and sales for its coming fiscal year mostly ahead of expectations. General Electric rose 39 cents, or 2.4%, to 16.72. Pfizer added 39 cents, or 2%, to 20.23.

Standard & Poor's on Tuesday placed the long-term credit rating of the European Financial Stability Facility, the region's bailout fund, on review for a possible downgrade. Yields on the facility's bonds rose shortly after the announcement. On Monday, S&P put France, Germany and 13 other euro-zone nations on review for credit downgrades.

This week, French President Nicolas Sarkozy and German Chancellor Angela Merkel said they will propose altering European Union treaties in order to bolster fiscal discipline.

The agreement comes as expectations are rising that European leaders will announce bold moves at the EU summit this week that tackle the debt crisis.

"Everyone's looking toward the summit as the next chance for a grand plan that may calm the markets a little bit," said Brad Sorensen, director of market and sector analysis at Charles Schwab. "The stakes were already pretty high, but S&P probably added to it a little bit. The ratings agency is ready to pounce if European leaders fail to announce anything substantial."

In corporate news, Leap Wireless said it has agreed to acquire a swath of wireless spectrum around Chicago from Verizon Wireless for $204 million while selling Verizon excess spectrum elsewhere for $188 million. Leap rose nine cents, or 1%, to 9.45.

Darden Restaurants forecast downbeat earnings for its fiscal second quarter and lowered its 2012 projections. Shares dropped 5.91, or 12%, to 41.82.

Clearwire plans to seek $300 million in a new equity offering. The move comes after the company reached a deal last month with partner Sprint Nextel to help fund its operations beyond 2012. Shares rose 25 cents, or 11%, to 2.50.

Eastman Kodak reshuffled its restructuring advisers, hiring law firm Sullivan & Cromwell's restructuring practice to advise the company on ways to rework its finances, according to The Wall Street Journal. Kodak is looking for alternatives to a bankruptcy filing. Shares rose six cents, or 5.7%, to 1.11.

Pay-as-you-go wireless carrier MetroPCS Communications said it has experienced a "very significant" reduction in the rate at which its customers leave, known as churn. Shares rose 65 cents, or 7.8%, to 9.00.

First American Financial said it will no longer pursue an acquisition of CoreLogic, retreating from previous offers to buy the real-estate processor and data-service provider. First American shares rose 94 cents, or 8.3%, to 12.34. CoreLogic declined 1 cent, or 0.07%, to 13.73.

-By Steven Russolillo, Dow Jones Newswires; 212-416-2180;

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