US stocks jump after ECB action

2012-06-07 08:14

New York - US stocks jumped more than 2.3% on Wednesday after the European Central Bank said it would keep open its unlimited liquidity loans for eurozone banks at least through 2012.

The market also got support from a fresh Federal Reserve report that, while not showing much improvement in the US economy since April, clearly showed no new sign of faltering.

The Dow Jones Industrial Average finished up 286.84 points, to 12,414.79.

The broad-based S&P 500 surged 29.63 (2.30%) to 1,315.13, while the tech-rich Nasdaq Composite gained 66.61 (2.40%) to 2,844.72.

Stocks were also helped by a Wall Street Journal report suggesting the Fed is considering "more action amid recovery doubts," said

Financial and energy shares led the push higher, with Bank of America leaping 7.6%.

ExxonMobil gained 3.32%and Chevron 3.4% after oil prices rebounded after an extended fall over the past month.

Homebuilder Hovnanian Enterprises, whose stock collapsed in the US housing market meltdown, jumped 18.2% to $2.01 after posting its first quarterly profit in two years, citing higher sales.

Newspaper group Lee Enterprises surged 18.2% on news that Berkshire Hathaway, the investment group of mega-billionaire Warren Buffett, had taken a 3.2% stake in the company.

Nasdaq OMX rose 1.7% after saying it had formed a plan to pay out $40m in cash and discounts to brokers claiming losses due to the Nasdaq exchange's technical glitches on the first day of Facebook's IPO on May 18.

The deal was immediately challenged by the rival New York Stock Exchange, which said the discounts were designed to steal business way from it.

Its parent company, NYSE Euronext, gained 3.0%.

Facebook itself turned higher after a nearly uninterrupted fall since its May 18 IPO, ending up 3.64% at $26.81. It was still nearly 30% below the IPO issue price of $38.

Bond prices fell sharply. The yield on the 10-year Treasury bond rose to 1.65% from 1.56% on Tuesday, while the 30-year climbed to 2.72% from 2.62%.

Bond prices and yields move in opposite directions.