Dow Jumps Above 12,000 on Eurozone Hopes

Friday, 11 Nov 2011 02:22 PM

 

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Stocks rallied Friday as new governments get ready to take over in Italy and Greece, the two countries at the center of Europe's debt crisis. Italy's Senate approved an economic reform bill, opening the way for Premier Silvio Berlusconi to step down.

The Dow Jones industrial average is up 266 points, or 2.2 percent, to 12,159 as of 10:45 a.m. Eastern.

Walt Disney Co. jumped 7 percent in early trading, the biggest gain in the S&P 500. The company reported record annual profits and revenues after the market closed Thursday, thanks to stronger advertising sales at ESPN and the Disney Channel.

The S&P 500 rose 25, or 2.2 percent, to 1,264. Both the S&P 500 and the Dow are now on track for weekly gains. For the week, the S&P is up 0.9 percent, the Dow 1.5 percent.

The Nasdaq composite rose 48, or 1.8 percent, to 2,673.

U.S. bond markets were closed for Veterans Day.

Markets were pummeled Wednesday when Italy's borrowing costs spiked and talks to name a new Greek prime minister broke down.

After Italy's Senate passed the bill, world markets turned higher, the euro edged up and oil rose above $98 a barrel. Two-year Italian government borrowing costs dropped below 6 percent after topping 7 percent earlier in the week. The legislation still has to clear Italy's lower house. Berlusconi has pledged to leave office once the reforms are passed.

In Greece, a former central banker was sworn in as interim prime minister. Lucas Papademos took over a coalition government after a two-week political crisis that jeopardized the country's ability to continue receiving emergency loans.

In corporate news, D.R. Horton Inc. returned to a quarterly profit as more people bought houses. But the builder's earnings and revenue fell below what analysts had expected. D.R. Horton's stock dropped 1.8 percent in morning trading.

Nordstrom Inc. also reported stronger quarterly profit late Thursday. But the retailer lowered its full-year profit outlook below what analysts expected. Its stock fell 1.5 percent.

Viacom Inc., the parent of Nickelodeon, said it will move its stock listing to the Nasdaq Stock Market from the New York Stock Exchange next month because it's more "cost effective." The company's class-B stock jumped 4 percent.

E-Trade Financial Corp. sank 5 percent. The online broker said late Thursday that it had decided against putting itself up for sale. E-Trade's largest shareholder, the hedge fund Citadel Advisors, had been pushing for a sale.
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