U.S. stocks advanced Thursday, after Greece shelved plans for a
financial-bailout referendum and the European Central Bank
announced a surprise interest-rate cut.
The Dow Jones Industrial Average rose 208.43 points, or 1.8%, to
12044.47, closing near session highs, after bouncing from early
triple-digit gains to barely positive and back again during the
session. It was the blue-chip Dow's second straight gain and eighth
rise in eleven days.
The Standard & Poor's 500-stock index added 23.25 points, or
1.9%, to 1261.15, and the technology-oriented Nasdaq Composite rose
57.99 points, or 2.2%, to 2697.97. All blue-chip stocks rose, as
did all S&P 500 sectors.
The gains came as Greece's prime minister scrambled to restore
political stability by jettisoning a referendum that investors
feared would undo the heavily indebted government's bailout
package. The move coupled with the ECB's unexpected interest-rate
cut and glimmers of strength in U.S. economic reports, including a
slight drop in U.S. jobless claims last week, to drive stocks
higher on both sides of the Atlantic.
"As the exogenous risk of Greece and European debt steps aside,
modest U.S. economic growth and the strong earning story can shine
through," said Stephen Wood, chief market strategist at Russell
Investments.
Energy, industrial and technology stocks were the S&P 500's
strongest sectors, while utilities, health care and consumer
staples, three areas often considered defensive, showed the
smallest gains.
European stocks reversed early losses; the Stoxx Europe 600
ended up 2.1% and Germany's DAX surged 2.8%. Asian bourses finished
mostly lower amid uncertainty over euro-zone issues.
Front-month Nymex crude oil for December delivery gained $1.56
per barrel, or 1.69% to $94.07, the second straight gain.
Front-month Comex gold for November delivery gained $35.50 per troy
ounce, or 2.05%, to $1764.20.
Yield on 10-year Treasurys rose 0.058 percentage points to
2.065%, also a second straight gain, and the price fell 17/32 to
100 17/32.
Kraft Foods was one of the strongest blue-chip stocks, advancing
$1.14, or 3.3%, to 35.78, after third-quarter earnings and revenue
exceeded expectations. The company also raised its full-year
outlook.
Jefferies Group was a focal point of euro-zone worries. A sharp
morning decline in the stock triggered market circuit breakers amid
fears about its exposure to Europe's sovereign-debt woes, which
prompted a company statement that Jefferies had "no meaningful net
exposure" as of Aug. 31. Shares finished down 26 cents, or 2.1%, at
12.01, after plunging as much as 20% earlier in the session.
Estee Lauder was the top stock in the S&P 500, rallying
18.09, or 18%, to 118.92, after the beauty-products company
declared a 2-for-1 split of its common stock, effective Jan. 20,
and increased its annual dividend by 40% to $1.05 a share. In
addition, the company's fiscal first-quarter results beat estimates
and the full-year outlook was raised.
Abercrombie & Fitch was the S&P's biggest decliner,
slumping 14.75, or 20%, to 59.26, after the retailer said it is
seeing a "slowing trend" in Europe, including falling same-store
sales at flagship locations.
Kellogg lost 4.13, or 7.6%, to 49.91, after the company reported
weaker-than-expected third-quarter sales growth. The company also
lowered profit projections.
Qualcomm jumped 3.93, or 7.5%, to 56.11, after the chip maker
reported better-than-expected fiscal fourth-quarter results and
provided an upbeat outlook for this quarter.
Eastman Kodak declined 8 cents, or 6.7%, to 1.12, after
reporting a wider third-quarter loss. The company also said it
expected a deeper full-year loss from continuing operations and
lower-than-anticipated revenue.
Limited Brands lost 26 cents, or 0.6%, to 42.96, after the
apparel retailer's October same-store sales growth undershot
expectations, offsetting an increased fiscal third-quarter earnings
view.
Fair Isaac soared 6.81, or 25%, to 33.99, after posting an
increase in fiscal fourth-quarter revenue. The credit-scoring
company also projected fiscal 2012 per-share earnings above
analysts expectations.
Strayer Education leapt 12.18, or 15%, to 90.84, after the
for-profit education beat Wall Street's third-quarter earnings
expectations, also announcing a $100 million stock buyback.
-By Brendan Conway, Dow Jones Newswires; (212) 416-2670;
brendan.conway@dowjones.com
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