November 24, 2020

Dow Barrels Ahead After Debt Remarks

Already rallying on earnings reports, stocks leaped further ahead Tuesday after President Obama announced a breakthrough on the debt-ceiling talks.

Earlier, stocks had risen more than 1 percent after Coca-Cola said its net income rose 18 percent on higher overseas sales and after I.B.M.’s results late Monday beat analysts’ estimates.

But it was after Mr. Obama spoke that the Dow Jones industrial average powered through a gain of more than 220 points to a high of 12,607.56. The Dow ended the day up 202.26, or 1.63 percent, to 12,587.42. The broader Standard Poor’s 500-stock index rose 21.29 points, or 1.63 percent, to 1,326.73, and the technology-heavy Nasdaq composite gained 61.41, or 2.22 percent, to 2,826.52.

President Obama said there was “progress” in negotiations with bipartisan lawmakers over raising the nation’s debt ceiling, leading to a deficit-cutting proposal by a bipartisan group of lawmakers that was “broadly consistent” with what the administration was pursuing.

Earlier, the Commerce Department said housing starts in the United States rose more than expected in June, reaching a six-month high, and permits for future construction unexpectedly increased.

Investors also took in quarterly earnings announcements from three major banks: Goldman Sachs reported a profit of $1.05 billion, a relatively weak showing; Bank of America said it lost $8.8 billion, in line with expectations as it settled legal claims related to its troubled mortgage division; and Wells Fargo reported a 29 percent increase in profit, as loan losses eased.

In Europe, the FTSE 100 index of leading British shares was up 0.65 percent at 5,789.99 points, while Germany’s DAX rose 1.19 percent to 7,192.67. The CAC 40 in France was 1.21 percent higher at 3,694.95 points.

The main point of interest in Europe this week will probably be Thursday’s meeting of European Union leaders in Brussels. They are scheduled to discuss a second bailout package for Greece, which relies on such lifelines to meet its obligations.

Just two days ahead of the meeting, it remained unclear whether a mechanism whereby Greece avoids a default will be clinched. If the credit rating agencies say Greece is in default following the bailout package, then there are real worries in the markets of renewed instability.

The euro has largely managed to withstand pressures of a potential Greek default in recent weeks, and was trading 0.3 percent higher at $1.4170.

Some Asian stocks pared some of their early losses after the European open, but still ended mostly down. Japan’s Nikkei 225 stock average extended losses to decline 0.9 percent to 9,889.72 after being closed for a national holiday Monday. Hong Kong’s Hang Seng rebounded to gain 0.5 percent to 21,902.40 while mainland China’s Shanghai Composite Index fell 0.7 percent to 2,796.98.

Oil prices reached $97 a barrel amid expectations that United States crude supplies dropped last week. Benchmark oil for August delivery was up $1.48 to $97.41 a barrel in trading on the New York Mercantile Exchange.

Article source: http://www.nytimes.com/2011/07/20/business/Daily-Stock-Market-Activity.html?partner=rss&emc=rss

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