Wall Street ends 7-day slide

NEW YORK Mon Nov 28, 2011 6:07pm EST

1 of 2. Traders work on the floor of the New York Stock Exchange November 28, 2011.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - Stocks rebounded from seven days of losses on Monday as investors used the latest effort from European leaders to resolve the region's debt crisis as an opportunity to cover short positions.

Trading was light, a sign skepticism remains high. Just 6.8 billion shares changed hands during the day on U.S. exchanges, below the daily average of 8 billion shares.

After the market's close, Fitch Ratings revised to negative the outlook on the United States' AAA credit rating after a special congressional committee failed to agree on at least $1.2 trillion in budget cuts.

Retailers were among the strong sectors following an robust start to the U.S. holiday shopping season. Record sales over the Thanksgiving weekend buoyed gains in large retailers, including Macy's, which rose 4.7 percent to $30.84.

The gains follow a seven-day string of losses on the benchmark S&P 500. The latest attempt to get the euro zone problems on the path to improvement involve a Franco-German push for tighter budgetary control over euro zone members.

Analysts say the move may not be followed by more buying without an actual plan for euro zone help.

"Unfortunately, these rallies are short-lived until real dollars or real euros are injected into the financial system," said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey.

Germany and France pushed to acquire powers to reject national budgets in the euro zone that breach European Union rules ahead of an EU summit on December 9.

An Italian newspaper report suggested the International Monetary Fund was preparing a rescue plan for Italy, but the IMF denied the report.

The Dow Jones industrial average was up 291.23 points, or 2.59 percent, at 11,523.01. The Standard & Poor's 500 Index was up 33.88 points, or 2.92 percent, at 1,192.55. The Nasdaq Composite Index was up 85.83 points, or 3.52 percent, at 2,527.34.

Stock futures showed little movement after the announcement from Fitch, and analysts said it was probably expected by the market.

"I don't think we're going to see much of a market reaction. It's generally confirmation of what's been built into the market," said Fred Dickson, chief market strategist at The Davidson Cos in Lake Oswego, Oregon.

During the regular session, all 10 S&P sectors were up sharply, but energy and consumer discretionary stocks were among sectors with the biggest gains. The S&P energy index was up 3.6 percent, while the S&P consumer discretionary index was up 3 percent and S&P financials rose 3 percent.

Weak consumer spending has been a worry for investors, and the holiday period would likely confirm whether there's been any improvement in that area.

A report on consumer confidence in November, which is expected to have risen, is due Tuesday.

The S&P retail index advanced 3.1 percent, including Best Buy Co Inc, which added 3.4 percent to $26.49.

(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

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Comments (5)
breezinthru wrote:
Ridiculous.
1. The IMF does not have 600 billion.
2. The Stability Pact is the only plan that has a chance (only a chance) of partial success in the long term. The Stability Pact, by design, splits the Eurozone. In that scenario, some European countries survive but some of the financial corporations in those same countries and abroad may not. The countries that do not become signatories to the pact are destined to default and their banks will be particularly hard hit.

Nov 28, 2011 8:41am EST  --  Report as abuse
Intriped wrote:
Correct breezinthru; How could they ask the common person to believe such a claim of 600 billion. I guess they could ask China but I do not believe they have 600 billion either. In this instance of a pact Hungary, Greece, Portugal, Spain, Italy and Ireland would be let go like a bad date.

Nov 28, 2011 10:11am EST  --  Report as abuse
FBreughel1 wrote:
@breezinthru: Hi, yes there will be more behind that.
@Intriped: aha, that must fit nicely to your earlier post that Russians may invade the EU. I wonder whether that is in line with US defense policy?

Nov 28, 2011 1:33pm EST  --  Report as abuse
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