US stocks rise on eurozone debt deal

United States stocks surged by more than two per cent on Thursday, after European leaders reached a long-awaited agreement to boost the regions bail-out fund. They also struck a deal on Greek bonds, Reuters reported.The S&P 500 was on pace for its best monthly percentage gain since January 1987 on optimism that European leaders were nearing a resolution of the sovereign debt crisis that could end market uncertainty and drive stocks for the near term."As a result of the fact that weve potentially taken euro Armageddon off the table there is sort of a refocusing on domestic fundamentals, which frankly have been pretty good over the last month," the Chief Equity Market Strategist at Federated Investors in New York, Mr. Phil Orlando, said.He cited the governments estimate of third-quarter economic growth, which expanded at the fastest pace in a year."Youve got a lot of folks that were defensively positioned, many of whom were short in different aspects of the market and theyve got to reverse those bearish bets in light of what is actually happening," Orlando said.The Dow Jones industrial average gained 302.39 points, or 2.55 per cent, to 12,171.43. The Standard & Poors 500 Index jumped by 36.27 points, or 2.92 per cent, to 1,278.27. The Nasdaq Composite Index climbed by 76.26 points, or 2.88 per cent, to 2,726.93.The gains on the S&P 500 broke the benchmark index out of a trading range between 1,230-1,250 and was just above the 200-day moving average of 1,274, viewed as the next significant technical resistance level.Financials were the best performers, with JPMorgan Chase & Company up by 7.2 per cent to $36.63 and Citigroup Incorporated jumping by 8.6 per cent to $33.85. The KBW Bank index shot up by 5.5 per cent.After more than eight hours of talks, European heads of state, the International Monetary Fund and bankers sealed a deal that also foresees a recapitalisation of hard-hit European lenders and a leveraging of the blocs rescue fund to give it firepower of $1.4tn.'Analysts see the European developments removing risk to the US economy and tamping down fears of it spilling over into the global financial system, although some felt it may be prudent to book profits from the recent rally.Exxon Mobil Corporation edged up by 0.3 per cent to $81.30 after the US oil and gas major said profit rose by 41 per cent in the third quarter, helped by higher crude oil prices and refining margins.Dow Chemical Companys quarterly profit narrowly missed expectations. Still, the stock rose by 8.4 per cent to $29.16, along with the broader market.
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