Loading…
Friday, October 31, 2014
Current Weather
Loading Current Weather....
Published: Monday, 9/26/2011 - Updated: 3 years ago

Stock rally on hopes that finance officials may move to contain Europe's debt crisis

ASSOCIATED PRESS

NEW YORK — Stocks rallied Monday as investors bet that European finance ministers would take action soon to prop up the region’s unstable economies.

European officials pledged over the weekend to take bolder steps to fight Europe’s debt problems, which threaten to slow the global economy.

German leaders want banks and private institutions that hold Greek bonds to take a bigger loss on those holdings to slash the country’s debt. European officials have also talked about increasing the $595 billion European rescue fund by allowing it to take loans from the European Central Bank.

The Dow Jones industrial average rose 168 points, or 1.6 percent, to 10,939 at noon Eastern time.

The Standard&Poor’s 500 rose 12.9, or 1.1 percent, to 1,149. The Nasdaq composite rose 9, or 0.4 percent, to 2,492.

Investors have been on edge about Europe’s debt problems for months. The Dow fell 6.4 percent last week, its biggest drop since the week ended Oct. 10, 2008 at the height of the financial crisis.

Greece is at risk of defaulting on its debt next month if it does not receive the next installment of a bailout package. If that happens, banks that hold Greek bonds would lose money. Analysts also worry that the economies in Europe and the U.S. could slip into another recession.

News that sales of new homes in the U.S. fell to a six-month low briefly sent indexes lower in morning trading, but by midday Eastern the Dow, S&P and Nasdaq were all higher.

The government reported that new home sales fell for the fourth straight month in August. The decline is the latest of many signs that the weak housing market is holding back the U.S. economy. In addition to worrying about a global economic banking crisis, investors fear that the U.S. could be enter another recession.

Boeing Co. rose 3.9 percent after the company delivered its first 787 aircraft to Japan’s All Nippon Airways. An analyst said the company’s earnings should rise for the next few years if the company is able to maintain steady production.

Berkshire Hathaway’s Class B shares rose 6.3 percent after the company announcing a plan to repurchase stock for the first since 1965.

Clorox Co. fell 4.8 percent after Carl Icahn withdrew his slate of directors. That suggested the activist investor was unable to find a buyer for the consumer products company.



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.

Related stories