--Stocks rise as euro-zone worries recede
--DJIA, S&P 500 and Nasaq finish at three-month highs
--Knight Capital tumbles after announcing preferred
NEW YORK--The Dow busted out of its Monday rut, starting off a week
with an increase for the first time since May, as worries about
Europe's sovereign-debt crisis ebbed.
The Dow Jones Industrial Average rose 21.34 points, or 0.2%, to
13117.51, padding Friday's 217-point gain. The blue-chip benchmark
rose on the week's first trading session for the first time since May
21, the day after Memorial Day, snapping a nine-week string of Monday
declines--the longest such streak since 1973.
Stocks marched higher despite a late-session swoon that trimmed gains;
the Dow had risen as many as 91 points earlier. The S&P 500 added 3.24
points, or 0.2%, to 1394.23, after flirting with 1400 for the first
time in three months. The Nasdaq Composite Index rose 22.01 points, or
0.7%, to 2989.91.
Materials and technology stocks staged the strongest advances, and
only the defensive-oriented utility, health-care and consumer-staple
stocks lost ground among the S&P 500's 10 sectors.
Best Buy was at the top of S&P 500's leader board, surging $2.35, or
13%, to $19.99. The stock jumped after Richard Schulze, the big-box
electronics retailer's founder and former chairman, offered to buy the
shares of the company he doesn't already own, a bid the company called
"unsolicited" and "highly conditional."
Knight Capital plunged 98 cents, or 24%, to 3.07 after the struggling
trading firm said it sold $400 million in convertible preferred stock
to keep itself afloat. Shares briefly dipped below $3, after closing
at $10.33 last Tuesday, a day before racking up $440 in trading
losses.
Cognizant Technology Solutions, which provides IT outsourcing
services, jumped 6.35, or 11%, to 64.21, after the company posted a
21% increase in second-quarter profits and raised its full-year
earnings guidance.
Investors expressed optimism about European Central Bank President
Mario Draghi's plan to address the euro zone's sovereign-debt crisis.
Last week, Spanish Prime Minister Mariano Rajoy suggested that the
debt-laden country may ask for aid from Europe's temporary bailout
fund. This followed comments from Mr. Draghi, who said the central
bank could focus on the purchase of short-term debt, which eased
Spain's cost to borrow.
"There's a sense that whatever the ECB has in mind is likely to
mitigate the crisis," said Jim Russell, chief equity strategist U.S.
Bank Wealth Management. "Yes, there's a recession [in Europe]. Yes,
there are risks. But maybe the Armageddon-scenario is off the table."
Gains in U.S. markets followed broad gains on European and Asian
exchanges. The Stoxx Europe 600 added 0.4%, closing at a more than
four-month high. Asian markets were broadly higher, with Japan's
Nikkei Stock Average rising 2% and China's Shanghai Composite climbing
1%.
Crude-oil futures rose 0.9% to settle at $92.20 a barrel, while gold
futures gained 0.4% to settle at $1612.90 a troy ounce. The U.S.
dollar slipped against the euro and the yen. The yield on 10-year U.S.
Treasury bonds fell to 1.556% as demand rose.
In other news, Tyson Foods slumped 1.23, or 8%, to 14.17 after the
meat processor lowered its revenue forecast for the year and said
second-quarter earnings tumbled at its beef segment.
HCA Holdings, the largest for-profit hospital operator in the U.S.,
skidded 1.05, or 4%, to 25.55 after disclosing inquiries involving
heart-procedure practices, which spooked investors in spite of the
company's surging quarterly earnings.
Pluristem Therapeutics surged 49 cents, or 15%, to 3.80 after the
company said its placenta-based treatment saved the life of a patient
suffering from bone-marrow failure.
Power and utility company AES dropped 54 cents, or 4.4%, to 11.71
after reporting that quarterly profit fell 20% after a double-digit
decline in revenue from its key Latin American business.
Write to Chris Dieterich at christopher.dieterich@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 06, 2012 07:05 ET (11:05 GMT)
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