US stocks rebounded from seven days of losses yesterday as investors used the latest effort from European leaders to resolve the region’s debt crisis as an opportunity to cover short positions.
Trading was light, a sign scepticism remains high. Just 6.2bn shares changed hands during the day on US exchanges, well below the daily average of 8bn shares.
Retailers were among the strong sectors following an robust start to the US holiday shopping season. Record sales over the Thanksgiving weekend buoyed gains in large retailers, including Macy’s, which rose 4.7 per cent to $30.84.
The gains follow a seven-day string of losses on the benchmark S&P 500. The latest attempt to get the Eurozone problems on the path to improvement involve a Franco-German push for tighter budgetary control over Eurozone members.
Analysts say the move may not be followed by more buying without an actual plan for Eurozone help.
“Unfortunately, these rallies are short-lived until real dollars or real euros are injected into the financial system,” said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey.
Germany and France pushed to acquire powers to reject national budgets in the Eurozone that breach European Union rules ahead of an EU summit on 9 December.
An Italian newspaper report suggested the International Monetary Fund was preparing a rescue plan for Italy, but the IMF denied the report.
The Dow Jones industrial average was up 291.23 points, or 2.59 per cent, at 11,523.01. The Standard & Poor’s 500 Index was up 33.88 points, or 2.92 per cent, at 1,192.55. The Nasdaq Composite Index was up 85.83 points, or 3.52 per cent, at 2,527.34.
All 10 S&P sectors were up sharply, but energy and consumer discretionary stocks were among sectors with the biggest gains.
The S&P energy index was up 3.6 per cent, while the S&P consumer discretionary index was up 3 per cent and S&P financials rose 3 per cent.
Weak consumer spending has been a worry for investors, and the holiday period would likely confirm whether there’s been any improvement in that area.
A report on consumer confidence in November, which is expected to have risen, is due today.
The S&P retail index advanced 3.1 per cent, including Best Buy, which added 3.4 per cent to close at $26.49.