* Italian prime minister's resignation stokes uncertainty
* Euro bounces back, Monti reaction possible overdone
* Oil, copper firm after upbeat Chinese data
By Wanfeng Zhou
NEW YORK, Dec 10 U.S. stocks rose on Monday,
helped by gains in McDonald's and technology stocks, but Italian
shares and bond prices sank after Prime Minister Mario Monti's
decision to resign stoked concern about who will lead the euro
zone's third biggest economy out of its debt crisis.
The euro had earlier weakened, but it managed to rebound
against the dollar and pared most losses versus the yen as some
analysts said the reaction to Monti's resignation may have been
Sentiment in financial markets was cautious as investors
awaited any sign of progress in budget talks in Washington to
avert looming tax hikes and spending cuts that could push the
economy back into recession.
The heightened rhetoric and lack of substantial progress has
handcuffed the equities market. The benchmark S&P 500 index has
yet to see a move greater than 0.5 percent in either direction
for December, and hasn't moved more than 1 percent either way
since Nov. 23.
"What we have been seeing is any headline that emanates from
anywhere in the world will drive the market pretty quickly one
way or the other," said Keith Bliss, senior vice president at
Cuttone & Co, in New York.
"People are out of the market if they have already got their
gains (for the year), and the other thing is anybody that is in
the market is just kind of sitting around waiting."
U.S. President Barack Obama met with Republican House of
Representatives Speaker John Boehner on Sunday, but the two
sides declined to provide details about the unannounced meeting.
Obama was expected to make remarks at 2 p.m. (1900 GMT) from
Michigan where he is touring an auto plant.
The Dow Jones industrial average gained 31.72 points,
or 0.24 percent, to 13,186.85. The Standard & Poor's 500 Index
rose 2.65 points, or 0.19 percent, to 1,420.72. The
Nasdaq Composite Index added 12.76 points, or 0.43
percent, to 2,990.80.
Shares of McDonald's rose 1.4 percent to $89.71
after the fast food chain reported stronger-than-expected sales
in November, marking a rebound after a rare decline in October.
Technology stocks were the S&P 500's best-performing sector,
helped by a 3.6 percent climb in Hewlett-Packard Co to
$14.30 on rumors that activist investor Carl Icahn is building a
stake in the PC maker. The stock is down 44.5 percent for the
year and ranks as the Dow's worst performer.
Cisco Systems also buoyed the tech sector after the
company laid out its mid-term growth strategy on Friday. Its
shares were up 2.2 percent at $19.77.
Gains in U.S. stocks helped European markets erase losses
sparked by the concerns about Italy. The FTSEurofirst 300 index
rose 0.2 percent to end at 1134.53 points, led by
STMicroelectronics after the French-Italian company
announced plans to quit a loss-making joint venture.
The MSCI global stock index rose 0.2 percent
to 335.21 points.
Monti announced over the weekend he would resign once the
2013 budget is approved, potentially bringing forward an
election due early next year. Monti has become an investor
favorite over the last year as he spearheaded a reform agenda in
a bid to rescue Italy from the threat of a Greek-style collapse.
The news pushed Italy's benchmark 10-year bond yield up to
4.83 percent, the highest in roughly more than
three weeks. Italian shares fell more than 2 percent,
with banks hit hard because of their hefty domestic government
Against the yen, the euro dropped as low as 105.94
yen, its weakest in about two weeks, before recovering to trade
at 106.61 yen, little changed on the day. Against the dollar,
the euro rose 0.1 percent to $1.2939.
Commodities markets rose on data from China that showed
factory output in the world's number two economy accelerated to
an eight-month high in November.
Copper prices hit their highest level in almost two
months, gold rose to around $1,712 an ounce, and Brent
oil snapped five straight days of losses to climb back around
$108 a barrel.
Brent futures jumped to $108.54 before easing back
to trade at $107.98, up 96 cents. U.S. crude rose 32
cents to $86.25.
China's implied oil demand broke through the 10 million
barrel per day barrier for the first time ever in November, and
crude imports also rose, providing more evidence of economic
"The figures are another confirmation that Chinese oil
demand is accelerating again, and there are good reasons to
expect that it will carry on growing strongly next year," said
Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
U.S. Treasury debt prices rose on concerns over the
protracted budget negotiations in Washington, political
rumblings in Italy, and expectations for further monetary policy
easing by the Federal Reserve when it meets this week.
The benchmark 10-year U.S. Treasury note was up 1/32 in
price, with the yield at 1.625 percent.
The Fed is expected to announce a new round of Treasury
securities purchases at the end of its two-day meeting on
Wednesday, according to a Reuters poll. The bond buying would
replace the "Operation Twist" stimulus, which expires at the end