USA: Wall Street closes higher on investor optimism over a planned summit to tackle the euro zone debt crisis
Record ID:
346434
USA: Wall Street closes higher on investor optimism over a planned summit to tackle the euro zone debt crisis
- Title: USA: Wall Street closes higher on investor optimism over a planned summit to tackle the euro zone debt crisis
- Date: 7th December 2011
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (DECEMBER 6, 2011) (ORIGINALLY 4:3) (REUTERS) (SOUNDBITE) (English) BETH ANN BOVINO, SENIOR ECONOMIST, STANDARD & POOR'S, SAYING: "It's good that people recognize that the U.S. economy is starting to show a bit more momentum with the jobs numbers coming in looking a bit better than certainly we had expected. Good news for the U.S. economy, however there certainly is linkages and risks if the euro zone gets much weaker. I think the U.S. recovery could withstand a mild recession, in fact that is my forecast, but if you did see something much more severe, if you did see a much more severe recession in the euro zone and certainly a hit to European banks that could spread to U.S. banks that could be one certain area which would push the U.S. most likely into a recession." NEW YORK CITY, NEW YORK, UNITED STATES (DECEMBER 6, 2011) (REUTERS) STANDARD & POOR'S HEADQUARTERS IN LOWER MANHATTAN VARIOUS STANDARD & POOR'S EXTERIORS/ SIGN
- Embargoed: 22nd December 2011 12:00
- Keywords:
- Location: Usa, Usa
- Country: USA
- Topics: International Relations,Politics
- Reuters ID: LVAACNZBG14PCE2J4AXR4AEYQ3EI
- Story Text: U.S. stocks rose on Tuesday (December 6) as investors bet European leaders would take strong steps this week to end the region's debt crisis, including bolstering its financial rescue fund.
The latest source of optimism came from a Financial Times report that European leaders will discuss boosting the firepower of the euro zone's rescue fund at the summit. The report cited senior European officials.
At the summit on Thursday (December 8) and Friday (December 9), France and Germany are expected to try to force changes to EU rules to impose mandatory penalties on countries that exceed deficit targets in hopes of restoring market confidence.
Optimism over Europe coming to grips with its debt crisis was reflected in a sharp slide of Italian and Spanish bond yields in recent sessions away from levels many see as unsustainable.
Tuesday's gains came as investors shrugged off a warning from Standard & Poor's on Monday that it may cut the sovereign credit rating of 15 euro-zone countries. The rating agency threatened on Tuesday to cut the credit rating of the euro zone's financial rescue fund.
Beth Ann Bovino, a Senior Economist at Standard & Poor's, said despite the recent good news about the U.S. economy, there is still a danger that european debt problems could derail the U.S. recovery.
"It's good that people recognize that the U.S. economy is starting to show a bit more momentum with the jobs numbers coming in looking a bit better than certainly we had expected," said Bovino.
"There certainly is linkages and risks if the euro zone gets much weaker," added Bovino. "If you did see a much more severe recession in the euro zone and certainly a hit to European banks that could spread to U.S. banks that could be one certain area which would push the U.S. most likely into a recession."
The Dow Jones industrial average gained 52.30 points, or 0.43 percent, to 12,150.13. The Standard & Poor's 500 Index added 1.39 points, or 0.11 percent, to 1,258.47. But the Nasdaq Composite Index dropped 6.20 points, or 0.23 percent, to 2,649.56.
In an interim report, European Council President Herman Van Rompuy told EU leaders tighter oversight of euro-zone fiscal policy can be achieved through minor rapid adjustments to the EU treaty.
General Electric Co was the Dow's top percentage gainer, climbing 2.4 percent to $16.72 (USD) after Bernstein upgraded the stock to "outperform," citing strong financial fundamentals and expected dividend increases. - Copyright Holder: REUTERS
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