US stocks shoot up on stronger data
US stocks shot higher yesterday, ending a four-day losing streak as optimism about upcoming earnings gathered steam and data showed the services sector expanded for the first time since August 2008.
The Dow Jones industrial average was up 112.08 points, or 1.18 per cent, at 9,599.75. The Standard & Poor’s 500 Index closed up 15.23 points, or 1.49 per cent, at 1,040.44. The Nasdaq Composite Index gained 20.04 points, or 0.98 per cent, to 2,068.15.
Meanwhile, European shares ended 0.8 per cent higher as better-than-forecast data in the US and Europe helped lift banks, while telecoms were boosted by merger activity between Telenor and Alfa Group.
The FTSEurofirst 300 index of top European shares closed up 0.8 per cent at 971.21 points, after falling for three sessions in a row.
The index, which slumped 45 per cent last year, is up 17 per cent in 2009 and has surged over 50 per cent since hitting a record low in early March.
Data on both sides of the Atlantic also reassured investors after non-farm payrolls data contributed to a 1.9 per cent fall on Friday.
The US service sector expanded in September at a faster pace than expected, with the Institute for Supply Management’s services index coming in at 50.9, compared to a forecast of 50.
Markit’s Eurozone Services Purchasing Managers’ Index of around 2,000 companies showed the euro zone’s services economy returned to growth for the first time in 16 months in September at a slightly better rate than first expected, but job losses grew.
Banks, which are sensitive to changes in risk appetite, gained. Barclays, HSBC, BNP Paribas and Deutsche Bank added 0.5-1.7 per cent.
However, investors said sentiment was still relatively fragile and third-quarter results from the US companies, which get under way this week with aluminium giant Alcoa, will determine where share prices end up.