Alexa

US stocks follow European markets higher

US stocks follow European markets higher

U.S. stocks followed European markets sharply higher Wednesday, breaking a three-day losing streak. Yahoo Inc. and Bank of America Corp. rose after announcing top-level management shake-ups.
The Dow Jones industrial average jumped 173 points, or 1.6 percent, to 11,312 at 11:15 a.m. The Dow and other U.S. indexes fell over the previous three days on worries about Europe's debt woes and weakness in the U.S. jobs market.
The Standard and Poor's 500 index rose 22, or 1.9 percent, to 1,186. The Nasdaq composite rose 44, or 1.8 percent, to 2,518.
All 10 company groups that make up the S&P index rose. Verizon Communications was the sole company among the 30 stocks that make up the Dow average to fall.
European indexes rose broadly after a German court upheld the country's role in bailing out other countries in the European Union. The ruling renewed hopes that Europe will find a solution to its debt problems. Germany's DAX index surged 3.7 percent; France's CAC-40 jumped 3.3 percent.
"The market has been pricing in an out-and-out recession, so any hints that policy issues might be solved is a plus," said Brian Gendreau, market strategist at Cetera Financial Group
The ruling from the German court pushed the prices of Treasury securities lower as investors were more willing to hold risky assets like stocks. Treasury prices have been rising over the past week, sending their yields lower, as demand for lower-risk investments increased.
The yield on the 10-year Treasury note rose to 2.04 percent. It traded at 1.97 percent late Tuesday, one of the lowest rates since the Federal Reserve Bank of St. Louis began keeping daily records in 1962. Gold, another traditional safe haven, fell $56, or 3 percent, to $1,817 an ounce. It closed at $1,891 on Aug. 22.
Yahoo and Bank of America rose sharply after announcing the departures of key executives after the market closed Tuesday. Yahoo gained 4 percent, to $13.41, after announcing that CEO Carol Bartz had been fired. Some analysts said the move made the company a takeover target. Bartz spent nearly three years steering the company.
Bank of America jumped 5 percent, to $7.34, after the bank said two top officers will leave. The changes were seen as one of chief executive Brian Moynihan's most dramatic moves to reshape the embattled bank. Bank of America shares have fallen 48 percent this year through Tuesday, compared with a 7 percent drop in the S&P 500 index.
Financial companies were the top performing group in the S&P 500 index. JP Morgan Chase & Co., Goldman Sachs and Wells Fargo each rose more than 2 percent.
The Federal Reserve will release its snapshot of regional business conditions at 2 p.m. (1800 GMT) The Fed's last survey was the weakest this year. Growth slowed in eight of the regions in June and July, bolstering concerns that the U.S. economy was headed back into another recession.