AppId is over the quota
AppId is over the quota
Wall Street stocks traded sharply higher on Tuesday after some economic news out of China and India helped mute concerns over the European debt crisis.
A fresh report on American manufacturing also fueled the rally. The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index rose to 53.9 points in December from 52.7 in November. Readings above 50 indicate expansion.
Europe’s debt woes will probably remain the main catalyst for markets in the coming days. But in the absence of any fresh bad news, trading in 2012 got off to a buoyant start after a mostly weak 2011, with the Standard & Poor’s 500-stock index up 2.1 percent in early trading.
The Dow Jones industrial average rose 2 percent and the Nasdaq composite index added 2.2 percent.
The euro also bounced back on Tuesday, trading 0.7 percent higher at $1.3041. Last week, it hit a 15-month dollar low of $1.2857 on worries that the European debt crisis would escalate this year and envelop Italy, the third-largest economy in the euro zone.
Surveys out Tuesday showing that growth in China and India may be picking up momentum helped shore up the underlying mood.
In afternoon trading in Europe, Germany’s DAX was up 1.4 percent but the CAC 40 in France was flat. Britain’s FTSE 100 index of leading British shares, which was closed Monday, was trading 1.7 percent higher.
It’s a busy week on the economic data front, culminating in Friday’s closely watched employment figures for December in the United States. The early consensus in the markets was that the American economy generated another 150,000 or so jobs during the month — solid, if unspectacular, jobs creation in the world’s largest economy.
“The market is hoping for further improvement in U.S. December payrolls data and this could lend support to risk appetite,” said Jane Foley, an analyst at Rabobank International.
Although that could give the euro some further respite this week, Ms. Foley said the currency “remains in a very vulnerable position.”
Following a year when policy makers across the euro zone have consistently failed to match expectations for resolving the debt crisis, investors will be monitoring efforts to enforce greater budgetary discipline on the 17 European Union countries that use the euro.
This week, both France and Germany will be tapping bond markets for fairly large amounts of money in what will be tests of market confidence. Next Monday, President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany will be holding their first meeting of the new year.
Progress on Greece’s talks with private creditors, who will be asked to take a bigger loss on their Greek bonds, will also be closely monitored. As part of the country’s second financial bailout, private creditors have been asked to forgive 50 percent of their holdings, but many in the markets think that’s not enough. There was speculation that the so-called Greek haircut may have to rise, possibly up to 75 percent.
“With the continuing economic woes of the country and the possibility that at some stage the rest of the E.U. may decide not to throw good money after bad, there must be a growing possibility that the actual write-down could eventually be close to 100 percent,” said Gary Jenkins, director of Swordfish Research.
Earlier, Asian stocks rose. Hong Kong’s Hang Seng Index, on its first trading session of 2012, jumped 2.4 percent, South Korea’s Kospi index rose 2.7 percent and Australia’s S.&P. ASX 200 gained 1.1 percent. Markets in Japan and mainland China remained closed for the extended New Year’s holiday.
Oil prices followed equities higher. Benchmark crude for February delivery rose $3.76 to $102.59 a barrel on the New York Mercantile Exchange.
View the original article in NYTimes.com