March 3, 2021

Relief Over Irene Helps Stock Markets Rise

Wall Street rallied 2 percent Monday as a merger between two big banks in Greece suggested Europe was working through its financial problems, while a rebound in spending by American consumers calmed fears of a new recession.Insurance company shares were higher after property damage from Hurricane Irene was less than feared, according to early estimates. Travelers Companies rose 4.7 percent to $50.59, while Allstate jumped 7 percent to $25.93.

Wall Street was also relieved that hurricane damage in New York City, especially in Lower Manhattan, was not as bad as expected. The New York Stock Exchange and the Nasdaq opened on schedule.

But trading volume was light, at about 1.9 billion shares by midday, as many Wall Street workers were stuck at home with commuter rail and some bus lines not operating. The New York City subway system slowly returned to service early Monday after a systemwide shutdown.

At midday, the Dow Jones industrial average of 30 stocks jumped 193.10 points, or 1.71 percent, at 11,477.64. The Standard Poor’s 500-stock index put on 24.47 points, or 2.08 percent, at 1,201.27. The Nasdaq composite index advanced 62.53 points, or 2.52 percent, at 2,542.38.

Financial stocks were the top gainers after Greece’s Alpha and EFG Eurobank banks sealed a megamerger that is expected to trigger more deals to shore up the sector battered by a severe debt crisis and recession.

The S. P. financial index was up 2.7 percent and the KBW Banks index added nearly 2.8 percent. Bank of America rose 5.5 percent to $8.19 and JPMorgan Chase gained 3.1 percent to $37.34.

Keith Wirtz, chief investment officer at Fifth Third Asset Management, with $18 billion in assets, said: “We’ve actually started putting cash to work. A few things helping the stock market. There’s relief coming from the storm and Europe, particularly with Greece.”

New York-listed shares of National Bank of Greece soared 35 percent to $1.13.

Major European indexes ended up more than 2 percent.

Consumer spending recorded its largest increase in five months in July, supporting views the economy was not falling back into recession. Also, July pending home sales fell 1.3 percent, matching forecasts, but remained higher than year-ago levels.

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