NST Online Business Times : latest
NST Online Business Times : latest |
| US stocks in solid gains after EU deal Posted: 09 Dec 2011 06:58 PM PST NEW YORK: US stocks ended another rocky week with solid gains Friday after European Union leaders, except Britain, set a tentative pact on tougher fiscal discipline. The Dow Jones Industrial Average closed up 186.56 points (1.55 per cent) to 12,184.26. The broader S&P 500 jumped 20.84 (1.69 per cent) to 1,255.19, while the tech-rich Nasdaq Composite gained 50.47 (1.94 per cent) to 2,646.85. EU leaders meeting in Brussels on the eurozone crisis gave a boost to markets when they declared their willingness to join a "new fiscal compact" that would bring uniform discipline to government spending.
But the deal will still set the standards for the 17 eurozone countries and the nine non-euro EU countries that agree to it. The move, tentative and not altogether convincing to some analysts, gave a modest boost to the euro. There were still worries that Standard & Poor's, after warning of a possible credit rating downgrade to eurozone countries on Monday, might follow through in the coming days if it finds the commitments to the new fiscal rules too weak. "The devil is in the details, and there, the details, we do not know everything," said Gregori Volokhine of Meeschaert. The summit "does nothing to address the credit crunch that is developing in Europe," said economist Desmond Lachman of the American Enterprise Institute. "Their failure today to agree on Treaty change to include legally binding rules for budget deficit reduction, leaves the European Central Bank with little cover to support the Italian and Spanish bond markets." Oil and big international bank stocks were gainers on the news, despite the doubters. ExxonMobil added 1.8 per cent, following oil prices higher. Morgan Stanley rose 3.2 per cent and Citigroup 3.7 per cent. Dupont was the only decliner among the Dow's 30 blue chips, losing 3.2 per cent after dimming its outlook for earnings this year, citing slower growth than expected. On the Nasdaq, Oracle surged 3.1 per cent while Google picked up 1.9 per cent. -- AFP
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