~:US stocks jump 3% on joint central banks' move:~
NEW YORK: US stocks jumped three percent in early trade on Wednesday after a joint move by major central banks to ensure that the global financial system could weather the severe stress in the eurozone.
In an announcement before the Wall Street markets opened, the central banks of the United States, the eurozone, Britain, Japan, Canada and Switzerland said they would make cheaper US dollars available to commercial banks facing a lack of liquidity in the markets, a move understood targeted at strained European banks.
At around 1530 GMT, one hour into trade, the Dow Jones Industrial Average was up 401.05 points (3.47 percent) to 11,956.68. The S&P 500 added 40.45 (3.38 percent) at 1,235.64, while the Nasdaq Composite rose 84.38 (3.35 percent) to 2,599.89.
The markets also got a boost from a clutch of positive US economic indicators: private-sector job creation jumped more than expected in November, a key business barometer for the Chicago region surged, and pending home sales, an indicator for strength in the housing market, rose strongly in October.
In addition, Canada reported that its economy grew at a 3.5 percent pace in the third quarter, beating estimates. Some analysts downplayed the overall significance of the news.
"These actions... obviously do not address the underlying cause of the rise in funding costs, particularly for European banks," said John Ryding and Conrad DeQuadros at RDQ Economics of the coordinated central banks' move.
Steven Ricchiuto, economist at Mizuho Securities, meanwhile said the economic data did not change the fact that the US economy "is bouncing along on a shallow growth trajectory."
"It is hard to believe that companies suddenly gave up on being exceptionally conservative and started to hire workers. Or that the consumer suddenly has all this excess cash to spend on new goods and services," he said. "Instead, I see this upturn as just one more in a series of false starts."
Market traders clearly ignored the words of caution. Caterpillar led the 30 Dow blue chips with a 5.5 percent jump; General Electric added 5.2 percent and Cisco and Alcoa both gained 5.1 percent.
Big banks were also up solidly, despite S&P's sweeping one-step downgrade of many on Tuesday after it adjusted its bank ratings criteria. Bank of America rose 4.7 percent; Wells Fargo 5.1 percent; JPMorgan Chase 4.2 percent; and Goldman Sachs 5.7 percent.
US bond prices slipped. The yield on 10-year US Treasuries rose to 2.08 percent from 2.00 percent on Tuesday, while the 30-year bond yield climbed to 3.07 percent from 2.96 percent. Bond prices and yields move in opposite directions.
Courtesy: The Economic Times
In an announcement before the Wall Street markets opened, the central banks of the United States, the eurozone, Britain, Japan, Canada and Switzerland said they would make cheaper US dollars available to commercial banks facing a lack of liquidity in the markets, a move understood targeted at strained European banks.
At around 1530 GMT, one hour into trade, the Dow Jones Industrial Average was up 401.05 points (3.47 percent) to 11,956.68. The S&P 500 added 40.45 (3.38 percent) at 1,235.64, while the Nasdaq Composite rose 84.38 (3.35 percent) to 2,599.89.
The markets also got a boost from a clutch of positive US economic indicators: private-sector job creation jumped more than expected in November, a key business barometer for the Chicago region surged, and pending home sales, an indicator for strength in the housing market, rose strongly in October.
In addition, Canada reported that its economy grew at a 3.5 percent pace in the third quarter, beating estimates. Some analysts downplayed the overall significance of the news.
"These actions... obviously do not address the underlying cause of the rise in funding costs, particularly for European banks," said John Ryding and Conrad DeQuadros at RDQ Economics of the coordinated central banks' move.
Steven Ricchiuto, economist at Mizuho Securities, meanwhile said the economic data did not change the fact that the US economy "is bouncing along on a shallow growth trajectory."
"It is hard to believe that companies suddenly gave up on being exceptionally conservative and started to hire workers. Or that the consumer suddenly has all this excess cash to spend on new goods and services," he said. "Instead, I see this upturn as just one more in a series of false starts."
Market traders clearly ignored the words of caution. Caterpillar led the 30 Dow blue chips with a 5.5 percent jump; General Electric added 5.2 percent and Cisco and Alcoa both gained 5.1 percent.
Big banks were also up solidly, despite S&P's sweeping one-step downgrade of many on Tuesday after it adjusted its bank ratings criteria. Bank of America rose 4.7 percent; Wells Fargo 5.1 percent; JPMorgan Chase 4.2 percent; and Goldman Sachs 5.7 percent.
US bond prices slipped. The yield on 10-year US Treasuries rose to 2.08 percent from 2.00 percent on Tuesday, while the 30-year bond yield climbed to 3.07 percent from 2.96 percent. Bond prices and yields move in opposite directions.
Courtesy: The Economic Times
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