Dow Jones: 11,538.95 (+254.41) SP 500: 1,210.09 (+33.29) Nasdaq: 2,562.11 (+82.26)
US STOCKS soared more than 2 per cent in a broad rally yesterday as a merger between two big Greek banks provided a rare bit of encouraging news out of Europe.
A rebound in consumer spending calmed fears of a new US recession and also helped lift all 10 SP sectors. Only five SP stocks ended in negative territory. However volume was low, amplifying the surge in shares.
Financial stocks were the top gainers after Greek banks Alpha and EFG Eurobank sealed a merger with help from Qatar, shoring up a sector battered by the euro zone’s debt crisis.
Insurers also rose sharply as property damage from Hurricane Irene was less than feared, according to early estimates.
“Many have come to see Greece as a lost cause, so to have a merger potentially making a strong (bank) in Greece indicates that it isn’t as dire a situation as might otherwise have been assumed,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio.
With public transport still struggling to return to service in New York yesterday after the area’s brush with Hurricane Irene, many Wall Street firms were understaffed, contributing to the lightest volume in a month.
Among insurers, Dow component Travelers Cos gained 5 per cent to $50.75, while Allstate jumped 8.5 per cent to $26.30, and Progressive rose 3.6 per cent to $18.89.
The Dow Jones industrial average was up 254.41 points, or 2.25 per cent, at 11,538.95. The Standard Poor’s 500 Index was up 33.29 points, or 2.83 per cent, at 1,210.09. The Nasdaq Composite Index was up 82.26 points, or 3.32 per cent, at 2,562.11.
Consumer spending recorded its largest increase in five months in July, supporting views the economy was not falling back into recession. The SP financial index was up 4.2 per cent and the KBW Banks index added 4.5 per cent.
Bank of America rose 8.1 per cent to $8.39, and JPMorgan Chase gained 3.9 per cent to $37.64. US-listed shares of National Bank of Greece soared 38 per cent to $1.15.
LDK Solar rose 5.8 per cent to $6.18 after it forecast third-quarter revenue above expectations.
