Tuesday, November 8, 2011

Global stocks rally as Berlusconi exit seen near

Global equities and the euro rallied on Tuesday after Italian Prime Minister Silvio Berlusconi said he would resign, sparking optimism that a new leader will act more aggressively to tackle Italy's debt problem, a critical step in containing the euro zone's credit crisis.

The Dow Jones industrial average ended up 101.79 points, or 0.84 percent, at 12,170.18. The S&P 500 gained 14.80 points, or 1.17 percent, to 1,275.92. The Nasdaq Composite rose 32.24 points, or 1.20 percent, to 2,727.49.

European shares rose, boosted by earnings news and hopes Italy's leader could soon step down, helping its austerity reforms and the region's debt crisis.

The FTSEurofirst 300 closed up 0.9 percent at 983.80 points in light volume, having been as high as 995.22 points, while Italy's blue-chip index closed up 0.7 percent, also well off its intraday high.

The Nikkei share average dropped more than 1%, with investors fearful about Europe's debt situation ahead of an Italian parliamentary vote on budget reforms, and as scandal-hit Olympus plunged after saying M&A funds were used to cover securities losses.

The Nikkei ended down for the second straight day, falling 1.3 percent to 8,655.51. The broader Topix index lost 1.7 percent to 738.03.