NEW YORK — Stock indexes rose Wednesday after a steep two-day drop as international leaders scrambled to save a week-old plan to stave off a financial crisis in Europe. Strong corporate earnings and a bump up in hiring by private companies also helped turn markets around.
The Dow Jones industrial average gained 187 points, or 1.6 percent, to 11,844 as of noon Eastern. The Dow lost 573 points the previous two days after the brokerage MF Global collapsed and Greece's prime minister surprised markets and his own government with a call to put unpopular austerity measures to a public vote.
The fear of a wider financial crisis eased Wednesday as the euro rose against the dollar and Treasury prices slipped. A revolt in George Papandreou's government could scuttle the Greek referendum, which is seen as a relief to investors because it would keep the bailout plan intact. Papandreou faces a confidence vote on Friday.
Should voters reject the austerity plan, it could lead to a messy default on Greece's debt that would send shock waves through Europe's financial system and likely cause massive losses for banks that hold Greek bonds. Only last week European leaders agreed to a wide-ranging plan to shore up European banks and heavily indebted countries like Greece and Italy.
Papandreou traveled to France Wednesday and is scheduled to meet with leaders of the Group of 20 nations Thursday and Friday. France and Germany are expected to insist that a bailout plan reached last Thursday is the best way to solve Europe's debt problems and avoid a financial crisis.
In the U.S., an increase in hiring helped lift stock prices. Automatic Data Processing said company payrolls rose by 110,000 in October, more than economists had expected. Most of the gains came from the service industry. ADP also revised its survey results for September higher. Investors see ADP's report as a precursor to the government's broader employment report, which is due out Friday.
The Standard and Poor's 500 rose 21 points, or 1.7 percent, to 1,239. The Nasdaq composite gained 32, or 1.2 percent, to 2,638.
Bank of America rose 3.9 percent, the largest gain among the 30 stocks in the Dow. MasterCard jumped 7.4 percent after reporting that quarterly earnings soared 38 percent. The results beat analysts' expectations.
Small stocks rose more than the overall market, a sign that investors were taking on more risk. The Russell 2000 index jumped 2.4 percent.
The yield on the 10-year Treasury note rose to 2.02 percent, up from 1.96 percent late Tuesday.
The Federal Reserve ends a two-day policy meeting later Wednesday and will release new economic forecasts. Investors will be keeping an eye on Fed Chairman Ben Bernanke's afternoon news conference. Most economists believe the Fed won't announce any new policy changes.
Among companies reporting quarterly earnings, EOG Resources Inc. rose 11.3 percent, the largest gain in the S&P 500 index. The oil and gas company reported third-quarter earnings that beat analysts' expectations after posting a loss a year ago.
JDS Uniphase Corp. jumped 8.8 percent, after the technology company's earnings surpassed estimates.
Comcast rose 1.3 percent after the country's largest cable company reported relatively strong results compared to its peers. It also signed up more customers for Internet service.
Read More
IPR: Indiana Michigan Power extends Tillotson Avenue road construction project
By Indiana Public Radio / 6 days agoOriginally, the project had a November completion date. In a statement Thursday, the company says it has found more damage to “the existing underground infrastructure.”
Indiana Capital Chronicle: New revenue eaten up by Medicaid budget forecast
By Indiana Capital Chronicle / December 18, 2024Actuaries defend $1B ‘mistake’
Ball State holds 200th Commencement ceremony
By Trinity Rea / December 14, 2024Ball State University held its 200th commencement ceremony Dec. 14, celebrating over 1,200 Cardinal graduates.
