Stocks Gain on Eurozone Debt Progress
NEW YORK (TheStreet) -- Stocks jumped on Wednesday after European leaders made some breakthroughs on stemming the eurozone debt crisis with China possibly helping the effort.
After gyrating throughout trading day, the Dow Jones Industrial Average finished with a gain of 162 points, or 1.4%, at 11,869. The S&P 500 advanced 13 points, or 1.1%, to close at 1242, while the Nasdaq settled up 12 points, or 0.5%, at 2651.
The statement that resulted from a highly anticipated summit between European Union leaders remained thin on details for a comprehensive debt plan. But Germany's agreement to back an initiative to lever up the region's emergency bailout fund was a balm to nervous investors.
European Union leaders agreed to recapitalize the region's financial system but remained in deadlock over the size of write-downs on Greek debt. Italy pledged to reform its pension system as part of a plan to balance its budget deficit, suggesting that the country was trying its best to meet the demands of its eurozone neighbors. Later in the day, stocks rallied further on news that China may help to bolster the eurozone rescue fund. French President Nicolas Sarkozy is expected to talk with Chinese President Hu Jintao on Thursday.The dollar index, a measure of the dollar's value against a basket of currencies, was rising 0.03%, while the euro wavered, last slipping 0.06% against the greenback. "I'm optimistic about the market if we can consolidate at this point, but we have to get Europe out of the way to give us greater clarity," said Real Money contributor Rev Shark in a Wednesday blog post. In Europe, London's FTSE closed 0.5% higher, while Germany's DAX finished 0.5% lower. Overnight, Asian markets saw a mixed close. Japan's Nikkei Average slipped 0.2%, while Hong Kong's Hang Seng added 0.5%. Keeping a cap on the Nasdaq's gains was Amazon.com (AMZN), which tumbled 13% after the company reported a profit miss and thinning margins. Especially concerning was the e-commerce giant's fourth quarter outlook. Amazon.com predicted a loss between $200 million to a profit of $250 million, which analysts say translates to a zero profit margin. In other earnings news, Dow component Boeing (BA) reported a third-quarter profit of $1.46 a share, shy of expectations of $1.10 in earnings per share. The company however hiked its year-end guidance above consensus estimates. Shares rose 4% to $66.56. Boeing helped the Dow index gain the most points, followed by Chevron (CVX) and Caterpillar (CAT). Microsoft (MSFT) and 3M (MMM) sunk to the bottom of the index. Ford (F) said its profits for the third quarter slipped on higher commodity prices and financial service weakness. The automaker reported worse than expected earnings but beat revenue expectations. The stock shed 5% to $11.87. Sprint (S) plunged 7% after posting a smaller-than-expected third-quarter loss of 10 cents a share on revenue of $8.3 billion. Analysts forecasted a loss of 22 cents a share on sales of $8.4 billion. The benchmark 10-year Treasury was down 27/32, lifting the yield to 2.21%. In commodity markets, gold for December delivery gained $23.90 to trade at $1,723.50 an ounce, while the December crude oil contract traded $2.49 lower at $90.68 a barrel. While Europe took precedence, investors also weighed some better-than-expected economic data. In the U.S., orders on machinery and other long lasting goods increased despite a plunge in orders for aircrafts. And while new-home sales remain weak, the read in September grew 5.7% as home prices declined. -- Written by Chao Deng and Melinda Peer in New York.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV