Stocks have bounded higher thanks to a jump in manufacturing activity and growing confidence that Ireland will resolve its debt crisis.
Most eyes were glued on General Motors, an American icon which re-emerged from bankruptcy in the second-largest initial public offering in history. Its shares, trading under the ticker GM, rose 3.6% to 34.19 US dollars.
The Dow Jones industrial average rose 173.35, or 1.6%, to close at 11,181.23. The Standard and Poor’s 500 index rose 18.10, or 1.5%, to 1,196.69. The technology-focused Nasdaq composite index rose 38.39, or 1.6%, to close at 2,514.40.
Stocks got a boost from a surprisingly strong reading on manufacturing from the Federal Reserve Bank of Philadelphia. The report said factory orders in the mid-Atlantic region expanded at the fastest rate since December.
All 10 industry groups within the S&P index rose, with industrial and materials stocks posting the largest gains. Alcoa jumped 3.4%, while General Electric rose 1.5% and Caterpillar rose 2.4%. All 30 stocks that make up the Dow rose except for Intel which edged down 0.3%. Sears Holdings sank 3.8% after reporting that its loss nearly doubled in the third quarter on weak sales.
Shares jumped in Europe after Ireland moved closer to accepting financial assistance from the European Union. Ireland has nationalised three of its six local banks following a collapse of the country’s real estate market.
If it accepts outside help, Ireland will become the second European country to need a bailout this year. Greece came close to fiscal collapse in May and had to be rescued by other European countries and the International Monetary Fund. Fears that Greece’s fiscal morass would undermine the euro and lead to bailouts of other European countries brought stock prices down around the world in May and early June.
Ireland is also expected to accept a loan worth tens of billions of euros from the UK.
The Euro Stoxx 50 index, which tracks blue chip companies in the euro zone, gained 1.4%.
Bond prices retreated, pushing their yields higher. The yield on the 10-year Treasury note rose to 2.90% from 2.87% late Wednesday. The yield on the note, which is a widely used benchmark for consumer and business loans, traded as low at 2.49% on November 4.