Wednesday, October 12, 2011

Wall Street extends gains on euro-fund optimism; European shares hit nine-week high

US stocks rose on Wednesday as Europe's progress toward bolstering its financial rescue fund brought more battle-weary investors back into the market.

The Dow Jones industrial average rose 102.55 points, or 0.90 percent, to end at 11,518.85. The Standard & Poor's 500 Index gained 11.71 points, or 0.98 percent, to 1,207.25. The Nasdaq Composite Index shot up 21.70 points, or 0.84 percent, to close at 2,604.73.

The S&P 500 traded above 1,200 for the first time in three weeks, taking the benchmark near the upper end of a range it has been stuck at since early August.

European shares hit a nine-week closing high after stronger euro zone economic data and news that Slovakia is set to sign off on a plan to expand the region's sovereign bailout fund helped spur demand for cyclical stocks.

By the close, the broader FTSEurofirst 300 index of leading European shares was up 1.6 percent at 977.02 points, its highest close since Aug. 4.

The Nikkei average snapped a three-session winning streak on lingering worries over the global economy and as floods in Thailand shut factories run by Honda and many other Japanese manufacturers.

Although speculators bought back some recently battered shares including shipping firms, investors are not convinced European policymakers can dispel worries over the financial system through measures they have promised to deliver by the end of the month.

The Nikkei benchmark fell 0.4 percent to 8,738.90, though it trimmed losses a tad on a rebound in Chinese shares and stayed above the 25-day moving average around 8,637.