Dow gains most in 3 months on strong economic data

08:21, December 02, 2010      

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U.S. stocks rallied on Wednesday, with the Dow Jones industrial average achieving biggest gains in three months, as strong U.S. jobs report and solid manufacture growth from both China and Europe boosted market sentiment.

The Dow Jones industrial average soared 249.76 points, or 2.27 percent, to 11,255.78. The Standard &Poor's 500 index jumped 19. 47 points, or 1.64 percent, to 1,206.07 and the Nasdaq was up 49. 43 points, or 2.05 percent, to 2,549.43.

The rally was broad-based, with all 10 industry groups in Standard and Poor's 500 index rose, led by energy, industrial and technology companies.

Major indexes soared right after the market opened as monthly data from payroll processing firm ADP showed an unexpectedly gain of 93,000 private sector jobs in November. It marked the biggest gain in three years and came in much higher than the 58,000 gain expected by analysts. What's more, the report also notably revised the October number up from 43,000 to 82,000, showing signs of real recovery in the U.S. jobs market.

Adding to the cheer, the Purchasing Managers Index (PMI), a gauge of business activity, rose to 55.2 percent last month from 54.7 in October, marking an increase for the fourth consecutive month, according to the China Federation of Logistics and Purchasing.

Meanwhile, separate reports also showed that euro-zone manufacturing activities picked up to its strongest level in four months in November, and British manufacturing activity accelerated unexpectedly to a 16-year high in the same period of time.

Investors also felt relieved after a bond auction in Portugal met stronger demand than people had expected. Euro rebounded on speculation that the European Central Bank might take action to curb its recent losing streak.

Further lifting the sentiment, a report said that the United States would support a larger aid package for Europe through the International Monetary Fund, even though U.S. and European officials both denied after the report.

Wednesday's move came after Wall Street's first monthly drop since August amid concerns that the European debt problems would spread to other debt-burdened countries, such as Portugal, or much more seriously, Spain.

Source: Xinhua


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