Good news in Europe drives stocks higher
The stock market ping-pong ball bounced up as investors cheered new moves by debt-hobbled European nations to tackle their fiscal woes.
The passage of an austerity budget in Italy and further steps toward a unity government in Greece comforted investors who earlier in the week had feared the potential collapse of the continent’s currency union.
Better-than-expected U.S. consumer confidence numbers also stirred optimism that the domestic economy is faring reasonably well in the face of Europe’s troubles.
The Dow Jones industrial average jumped 259.89 points, or 2.2%, to 12,153.68, its fourth gain in the last five days. The rally pushed the Dow to a modest 1.4% advance for the week.
But the sole down day was a big one -– the Dow tumbled nearly 400 points Wednesday on concern that Europe’s debt crisis would consume Italy -– and the market overall continued the volatile up-and-down trading pattern that has gripped it the last three months.
Each sign of progress in Europe sparks powerful rallies in the market, but bad news stirs equally abrupt sell-offs.
“I’ve never seen the markets in such a state, where they are so one-sided and flip-flop from day to day,” said A.C. Moore, chief investment strategist for Dunvegan Associates Inc. in Santa Barbara. “It’s really quite a phenomenon.”
-- Walter Hamilton
Photo credit: Reuters