Dow Jones: 11,433.18 (+186.45) Nasdaq: 2,607.07 (+34.52) SP 500: 1,209.11 (+20.43)US STOCKS rose yesterday, as the European Central Bank and international policy makers co-ordinated to lend dollars to banks to tame the credit crisis, offsetting concern spurred by signs unemployment is worsening.
“The central bank co-ordinated action is rather significant,” Brian Jacobsen, chief portfolio strategist at San Francisco-based Wells Fargo Funds Management, said. “Given their willingness to provide liquidity to European banks, it probably signals that the Fed is going to provide additional liquidity” for the US economy.
Stocks rallied as the ECB said it co-ordinated with the Fed, the Bank of England, the Bank of Japan and the Swiss National Bank to extend three-month loans to euro-area banks in an effort to ensure they have enough cash for the rest of the year.
The announcement added to optimism that policy makers were containing the European debt crisis after French and German leaders on Wednesday confirmed they will support Greece’s continued participation in the shared euro currency.
In the US, a report showed industrial production unexpectedly rose in August. That helped temper concerns about other data pointing to a weakening recovery.
Stock futures trimmed gains earlier as applications for US unemployment benefits rose last week to the highest level since the end of June.
US shares of UBS plunged 10 per cent to $11.39.
Switzerland’s biggest bank said it may be unprofitable in the third quarter after a $2 billion loss from unauthorized trading at its investment bank. London police arrested Kweku Adoboli, a UBS employee, in connection with the loss.
Netflix tumbled 18 per cent to $170.13. The online film rental service will have 2.2 million DVD-only subscribers in the third quarter, down from its previous projection of 3 million.
Citigroup gained 3.8 per cent to $28.43. Bank of America rallied 3.8 per cent to $7.32.
JPMorgan advanced 2.9 per cent to $33.76. Goldman Sachs rose 3.4 per cent to $108.04.
Chevron rose 1.9 per cent to $99.11.
Supervalu climbed 5.3 per cent to $7.89. The supermarket chain was rated “buy” in new coverage by Deutsche Bank. – (Bloomberg)
