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US STOCKS-Wall St rallies on data, euro strength
December 1, 2010 / 6:24 PM / 7 years ago

US STOCKS-Wall St rallies on data, euro strength

* U.S. private sector job creation jumps in November

* Euro surges against U.S. dollar as official comments

* Chinese factory data supports global growth bets

* Indexes up: Dow 2.3 pct, S&P 2.2 pct, Nasdaq 2.3 pct

* For up-to-the-minute market news see [STXNEWS/US] (Updates to early afternoon, changes byline)

By Chuck Mikolajczak

NEW YORK, Dec 1 (Reuters) - U.S. stocks surged 2 percent on Wednesday on hopes European officials would take drastic measures to stabilize euro zone finances.

Stocks extended gains after an official said the U.S. would be ready to back a larger European financial stability fund. The growing euro zone debt crisis has sunk markets in recent weeks, making any step toward resolution important to sustained market recovery.

“The real problem that derailed the markets two years ago was the lack of a coordinated effort to support economies,” said Eric Kuby, chief investment officerb at North Star Investment Management Corp in Chicago.

“This coordination is very positive to remind investors global (governments) remain accommodative and are not going to let economies fail and will not allow the contagion or spread of crises.”

U.S. economic data provided another bullish factor for stocks. Private employers added the biggest jobs gains in three years and manufacturing grew for a 16th month running. For details see [ID:nN01127417] and [ID:nTOE6B001C]

Incremental signs of hope have prompted only short-lived bursts of optimism. The EU/IMF rescue of Ireland last weekend was overshadowed by concerns about Portugal and other countries.

The Dow Jones industrial average .DJI gained 253.54 points, or 2.30 percent, to 11,259.56. The Standard & Poor's 500 Index .SPX climbed 25.76 points, or 2.18 percent, to 1,206.31. The Nasdaq Composite Index .IXIC advanced 57.16 points, or 2.29 percent, to 2,555.39.

The S&P 500 .SPX traded above its 14-day moving average for the first time in eleven sessions and was having its best day in almost a month, pushing through the recent resistance point of 1,200.

”“If we close above 1,200, the next stop is 1,225 to 1,230,” said Tom Alexander, head of Alexander Trading in Savannah, Georgia.

That target area coincides with a recent two-year high and the 61.8 percent Fibonacci retracement of the benchmark’s slide from October 2007 to March 2009, a key technical indicator.

The economic optimism helped boost the Dow Jones Transportation Average index .DJT, which posted its second gain of more than 2 percent in less than a week, catapulting it to its highest level since September 2008. Wednesday’s advance was led by gains in FedEx Corp (FDX.N), up 4 percent at $94.72, and CSX Corp CSX.N, up 3.2 percent at $62.77.

Also advancing was the S&P 500 retail sector index .RLX, up 2 percent to 500.05, its highest level since September 2007, Reuters data showed, reflecting an optimistic outlook for the holiday shopping season. (Additional reporting by Rodrigo Campos and Manuela Badawy; Editing by Kenneth Barry)

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