tocks rose yesterday, boosted by swift steps toward formation of a new Italian government and stronger-than-expected reports on the US economy.
Stocks sensitive to economic growth led the rally, with technology and industrials the best performers. Apple rose more than 2.5 per cent, up for only the second day in the last eight.
But despite yesterday’s advance and after posting gains in five of the last six weeks, the S&P 500 is flat for the year and trapped in a tight range.
Markets have been jittery as the Eurozone’s debt crisis is in danger of spiraling out of control. Borrowing costs spiked again in Italy. France, until now not viewed as problematic, also was hit by higher bond yields.
Mario Monti, Italy’s Prime Minister-designate, is expected to complete the process of forming a government in less than three days, much faster than normal, as Italy races to ward off a major financial and political crisis that has pushed its borrowing costs to untenable levels.
US retail sales rose broadly in October, and a gauge of manufacturing in New York state advanced in November, suggesting the economy could maintain momentum through the fourth quarter and pushing back recession fears.
The Dow Jones industrial average gained 17.18 points, or 0.14 per cent, to 12,096.16. The S&P 500 rose 6.03 points, or 0.48 per cent, to 1,257.81. Meanwhile the Nasdaq Composite added 28.98 points, or 1.09 per cent, to 2,686.20.
The euro fell against the US dollar, which has of late been an indicator of a declining stock market. The decoupling from this correlation could confirm the momentary shift in focus to the US economy.
In earnings news, Wal-Mart Stores’ quarterly profit missed expectations as the economy continues to weigh on customers in the United States, its largest division. Shares of the world’s largest retailer dropped 2.4 per cent to $57.46.
About 6.3bn shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, far below the year’s current daily average of about 8bn.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of more than eight to five, while on the Nasdaq, about two stocks rose for every one that fell.