German vote and economic data send stocks up
Stocks shot up this morning after investors got a number of encouraging signals about the European financial crisis and the U.S. economy.
The Dow Jones industrial average was up 219.98 points, or 2%, to 11,230.88 in early trading.
The German parliament voted overwhelmingly today to strengthen a European bailout fund for some of the European Union's weaker members, despite popular opposition to the plan. Investors had worried that a German rejection would scuttle hopes for a solution to the continent's debt crisis.
Major market indexes were recently up 1.8% in Germany and 1.6% in France.
Meanwhile, in the United States, the Commerce Department announced that the economy had grown faster than previously estimated in the second quarter of this year -- at a rate of 1.3%. This was also faster than economists had predicted.
A separate report showed that the number of people filing for unemployment benefits last week dropped by 37,000 from the previous week, to the lowest level since April.
Economists were cautious in taking too much hope from the new data. The data about economic growth are from the second quarter and much of the concern now is on falling economic activity in the current third quarter and moving forward. The Labor Department warned that the unemployment figures out today were likely skewed by a quirk of the calendar.
"Nothing in the data suggests that the economy has deviated much from [a] shallow growth trajectory," Steve Ricchiuto, the chief economist at Mizuho Securities, wrote in a note to clients this morning.
The rising stock prices this morning came after a pullback on Wednesday.
-- Nathaniel Popper in New York