Stocks Surge on Europe Deal,GDP
U.S. stocks rallied about 3% Thursday as investors bid up banks, resource and tech stocks after European leaders reached a deal to leverage their bailout fund, pump more money into banks and restructure Greece’s debt. The first estimate of U.S. economic growth for the third quarter also helped. The Dow Jones Industrial Average rose 339.51 points, or 2.86%, to 12,208.55. The S&P 500 gained 42.59 points, or 3.43%, to 1,284.59. The Nasdaq Composite rose 87.96 points, or 3.32%, to 2,738.63.
With their late-night deal to cut Greece’s debt and support other wobbly countries, European leaders bought time to work out more lasting solutions to the crisis plaguing the euro currency bloc. What they do with that time will determine whether this summit succeeds where many others have failed.
A summer of modest economic growth is helping dispel lingering fears that another recession might be near. Buoyed by a resurgent consumer and strong business investment, the economy expanded at an annual rate of 2.5 percent in the July-September quarter, the government said Thursday.
The number of Americans who signed contracts to buy homes fell for the third straight month in September after the spring-and-summer peak buying season failed to entice new buyers. The National Association of Realtors said Wednesday that its index of sales agreements fell 4.6 percent last month to a reading of 84.5.
Oil jumped more than 4 percent Thursday as the U.S. economy grew and Europe appeared to turn the corner on its debt crisis. Benchmark crude rose $3.76, or 4.2 percent, to end the day at $93.96 per barrel in New York. That’s the highest it’s been since the first week of August. Brent crude, which is used to price oil that’s imported into the U.S., rose $3.17, or 2.9 percent, to finish at $112.08 in London.