U.S. stocks leapt, posting the biggest single-day gain in a
month, as euro-zone leaders worked toward a new pact to stem
Europe's sovereign-debt crisis and a strong start to the holiday
shopping season boosted the retail sector.
The Dow Jones Industrial Average jumped 291.23 points Monday, or
2.6%, to 11523.01, snapping a four-day losing streak and erasing
more than half of last week's steep losses. Last week's swoon of
4.8% marked the worst Thanksgiving-week performance since markets
began closing in observance of the holiday in 1942.
The Standard & Poor's 500-stock index climbed 33.88 points,
or 2.9%, to 1192.55, snapping a seven-day losing streak as all but
six of the broad index's components gained. Materials, energy and
technology stocks posted the largest gains. The technology-oriented
Nasdaq Composite rose 85.83 points, or 3.5%, to 2527.34. All three
stock indexes posted their biggest point gains since Oct. 27. For
the Nasdaq, it was the biggest percentage gain since Aug. 23.
European markets finished with a rally and the Stoxx Europe 600
soared 3.8% after news that euro-zone leaders were negotiating
another agreement to contain the sovereign-debt crisis. A new pact,
including measures to curb excessive debt by making budget
discipline legally binding, could persuade the European Central
Bank to take more action to halt the selloff in debt markets.
Meanwhile, the International Monetary Fund denied a report it was
in bailout talks with heavily indebted Italy.
"We've seen 2011 be a 'risk-on, risk-off' environment," said
Stephen Wood, chief market strategist at Russell Investments.
"There's going to be some kind of resolution [in Europe or] a
solution will be forced on Europe by the markets."
Sales on Black Friday, the day after Thanksgiving, rose 6.6%
from a year ago, and sales for the four days starting on
Thanksgiving increased 16%, according to ShopperTrak. Meanwhile,
the National Retail Federation said shoppers spent 9.1% more on
Black Friday than they did last year. The overall retail sector
benefited, pushing the SPDR S&P Retail exchange-traded fund to
a gain of $1.67, or 3.4%, to $50.17.
Amazon.com rallied 11.75, or 6.4%, to 194.15, after the online
retailer said it sold four times more Kindle devices on Black
Friday than it did last year.
Consumer-electronics retailers also showed strength, with Best
Buy rising 86 cents, or 3.4%, to 26.49. Separately, Apple rose
12.55, or 3.5%, to 375.12.
"To have such growth in an economically uncertain environment
was encouraging to investors," said Lawrence Creatura, portfolio
manager at Federated Investors. "[But] the shopping season has many
days left and it's not clear whether exceptionally low prices,
increased hours and broader availability didn't just borrow sales
from future weeks."
Crude-oil prices advanced for the third session in four, rising
$1.44 per barrel, or 1.5%, to $98.21. Gold gained for the first
time in three days, rising $25.30 per troy ounce, or 1.5%, to
$1710.80.
Asian bourses posted gains as well. Japan's Nikkei Stock Average
rose 1.6% and Hong Kong's Hang Seng Index advanced 2%. The U.S.
dollar fell against the euro, but rose against the yen.
Demand for U.S. Treasury bills rose slightly, driving yield on
the 10-year note down to 1.958%, the fourth drop in five days. Bond
prices move inversely to their yields.
In economic news, sales of homes rose slightly in October, but
demand remained weak in historical terms. Sales increased 1.3% to a
seasonally adjusted annual rate of 307,000, from a downwardly
revised pace of 303,000 in September, according to the Commerce
Department.
Elsewhere, Commercial Metals Co. surged 2.72, or 24%, to 14.17.
Billionaire investor Carl Icahn's Icahn Enterprises offered to
acquire the scrap-metal processor in a bid valuing the company at
roughly $1.73 billion, or a 31% premium to the stock's closing
price Friday.
Oil stocks jumped following reports that the European Union is
considering banning imports from Iran, the latest escalation in
tensions over the country's nuclear program. Alpha Natural
Resources leapt 1.48, or 7.9%, to 20.29; Consol Energy gained 2.06,
or 5.8%, to 37.35, and Marathon Oil added 1.32, or 5.4%, to
25.98.
Madison Square Garden jumped 2.61, or 10%, to 28.37, after NBA
owners and union officials reached an agreement Saturday to end the
basketball league's lockout.
UnitedHealth Group affirmed its 2011 earnings forecast but
provided a 2012 outlook that was slightly below expectations. The
stock rose 1.36, or 3.1%, to 45.03.
-By Brendan Conway, Dow Jones Newswires; (212) 416-2670;
brendan.conway@dowjones.com