New York, NY (AP) - Stock indexes finished higher Wednesday
following reports that China will come to the aid of Europe by
investing in a financial rescue fund.
Agence France-Presse reported that China has agreed to invest in
Europe's financial rescue fund, which will be used to support
struggling countries and banks in the European Union. The Dow Jones industrial average jumped more than 100 points after the report came out in the early afternoon.
Stocks had been mixed for much of the day as investors weighed
stronger earnings from Boeing and Corning with uncertainty about
the outcome of a key meeting among European leaders.
Top European officials met in Brussels to discuss how to contain
the region's debt crisis, which has festered for two years. One
consideration is increasing the power of a financial rescue fund,
which Germany's parliament approved shortly before U.S. stock
European officials announced a plan after the U.S. market closed
that will require the region's banks to increase their levels of
cash to better protect themselves from losses on the Greek bonds
they hold. European governments have been pressing the banks to
forgive significant amounts of the Greek government's debt.
"This is a total news and rumor-driven market right now, and
everyone's attention is focused on Europe," said Joe Bell, an
analyst at Schaeffer's Investment Research.
The Dow Jones industrial average gained 162.42 points, or 1.4
percent, to 11,869.04. Boeing Co. led the way. It rose 4.5 percent
after it reported a bigger profit for its latest quarter than
analysts expected. It also raised its forecast for 2011 earnings.
The S&P 500 index rose 12.95, or 1.1 percent, to 1,242. The
Nasdaq composite added 12.25, or 0.5 percent, to 2,650.67.
Amazon.com Inc. slumped 12.7 percent after reporting a 73 percent
drop in income. The retailer cited higher costs for expansion.
Strong economic reports also helped send stocks higher.
Businesses ordered more heavy machinery and other long-lasting
manufactured goods last month, after excluding aircraft orders,
which can be volatile. That indicates businesses are still spending
on equipment despite worries about a weak economy and Europe's debt problems. Sales of new homes rose in September after falling for four straight months. Lower home prices enticed buyers.
The yield on the 10-year Treasury note rose to 2.21 percent from
2.14 percent late Tuesday as demand diminished for assets perceived to be relatively safe.
Corning Inc. rose 3 percent after reporting a 3 percent increase
in income last quarter on stronger sales of glass for flat-panel
televisions. Its earnings and revenue beat analysts' expectations.
First Solar Inc. rose 6.6 percent. It reported results a week
earlier than expected, and revenue and earnings both improved. That
helped the stock recover some of its losses from Tuesday, when it
fell 24 percent after the surprise departure of the company's chief
Five stocks rose for every one that fell on the New York Stock
Exchange. Volume was slightly above average at 4.8 billion shares.
(Copyright 2011 by The Associated Press. All Rights Reserved.)