Newsmax TV & Webwww.newsmax.comFREE - In Google Play
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
Tags: wall | street | dow | stocks

Wall Street Ends Best Week of Year as Aid for Spain's Banks Seen Near

Friday, 08 June 2012 08:43 PM EDT

Spain blinked. And Wall Street jumped. The U.S. stock market ended Friday's session with its best weekly gains of the year in a rally late in the day after sources told Reuters that Spain was expected to ask the eurozone on Saturday for money to bail out its troubled banks.

If the scenario unfolds as expected this weekend, Spain would become the fourth country to seek aid since Europe's debt crisis began. That could go a long way toward ending the uncertainty and worry that Spain's banking woes could prolong a downturn in the eurozone into recession and hurt the U.S. economy for the foreseeable future.

Five senior European Union and German officials said eurozone deputy finance ministers would hold a conference call on Saturday morning to discuss Spain's request for help to recapitalize its banks. This was seen as an effort to stem the tide of worsening market turmoil.

"They're asking for the banks to be allowed to tap" the European Financial Stability Facility, said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, whose firm manages about $13 billion in assets.

"So I think that gives folks some hope, but most of these measures tend to be temporary boosts to investor psychology."

U.S. President Barack Obama said on Friday that European leaders face an "urgent need to act" to resolve the region's financial crisis as the threat of a renewed recession there spells dangers for an anemic U.S. recovery.

On Friday, the S&P financial index rose 1.2 percent while the KBW bank index climbed 1.7 percent and shares of JPMorgan Chase & Co. advanced 2.7 percent to $33.68 - all adding to gains just ahead of the close.

The Dow Jones Industrial Average rose 93.24 points, or 0.75 percent, to end at 12,554.20. The Standard & Poor's 500 Index gained 10.67 points, or 0.81 percent, to 1,325.66. The Nasdaq Composite Index climbed 27.40 points, or 0.97 percent, to close at 2,858.42.

For the week, the Dow advanced 3.6 percent, the S&P 500 rose 3.7 percent and the Nasdaq jumped about 4 percent - the best percentage weekly gains for all three indexes since December.

As the eurozone's fiscal troubles grew worse in recent weeks, even Ronald McDonald felt the pinch.

Underscoring the impact of Europe's debt crisis, McDonald's Corp., the world's largest hamburger chain, reported a lower-than-expected rise in global same-store sales in May and warned that austerity measures in Europe were taking a toll. McDonald's stock fell 0.7 percent to $87.75, causing the biggest drag on the Dow.

Stocks' strong gains came about a week after the benchmark S&P 500 index fell more than 6 percent in May and dropped just below its 200-day moving average, signaling a technical bounce for equities.

But the rally took place on light volume of 6.2 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with the year-to-date daily average of 6.85 billion shares.

Shares of Facebook added 3 percent to $27.10.

CNBC reported that Swiss bank UBS may have lost as much as $350 million from trading Facebook's stock amid the confusion of the social network's glitch-ridden debut on May 18. UBS was not immediately available for comment.

Though financials gained steam late in the session, telecommunications was the day's best-performing S&P 500 sector. Verizon Communications Inc. gained 1.9 percent to $42.44 and the S&P telecom sector index rose 1.5 percent.

Among other names in the news, Chesapeake Energy Corp. plans to sell its pipeline and related assets to Global Infrastructure Partners in three separate transactions worth more than $4 billion, as the company scrambles to plug an estimated $10 billion funding shortfall.

In addition, Chesapeake shareholders delivered a broad rebuke of the company's board, withholding support for two members up for re-election in the wake of a governance crisis and poor financial performance. Chesapeake's stock gained 2.9 percent to $18.36.

Best Buy Co. Inc. founder and Chairman Richard Schulze resigned from the retailer's board on Thursday and said he was exploring options for his 20.1 percent ownership stake, a move seen as a possible precursor of a Schulze-led private takeover.

Best Buy's stock rose 2.3 percent to $19.98.

Advancers beat decliners on the NYSE by a ratio of about 7 to 3 and on the Nasdaq by about 2 to 1.

© 2024 Thomson/Reuters. All rights reserved.

Friday, 08 June 2012 08:43 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved
© Newsmax Media, Inc.
All Rights Reserved