U.S. stocks rise sharply on Fed stimulus hopes; Dow Jones up 1.03% federal bank
Forexpros - U.S. stocks opened higher on Wednesday, amid growing hopes for further stimulus measures by the Federal Reserve, while comments from European Central Bank President Mario Draghi disappointed investors expecting signs of additional easing by the central bank.
During early U.S. trade, the Dow Jones Industrial Average climbed 1.03%, the S&P 500 index jumped 1.20%, while the Nasdaq Composite index gained 1.51%.
Speaking at the ECB?s post policy meeting press conference, Draghi said that there were downside risks to the European economy, stemming from the debt crisis in the region and its growing potential to spill over to the wider economy.
Draghi said the bank would extend its policy of lending banks until mid-January 2013 but didn't announce any new three-year lending operations, disappointing market expectations for fresh easing measures to stabilize markets.
Investors shifted their attention to a Congressional testimony by Federal Reserve Chairman Ben Bernanke on Thursday about the state of the U.S. economy. The Wall Street Journal, citing interviews and Fed speeches, reported late Tuesday that the U.S. central bank is mulling new measures to stimulate growth in the world?s largest economy.
Charles Evans, president of the Chicago Federal Reserve Bank called earlier for aggressive policy easing in the U.S., citing the recent run of "soft" economic data.
Financial stocks were broadly higher, led by Bank of America, up 1.69%, and closely followed by Citigroup, whose shares climbed 1.51%, while JP Morgan and Goldman Sachs advanced 1.63% and 1.19% respectively.
Energy companies also contributed to gains, as Chevron rallied 1.32% and Exxon Mobil rose 0.95%, while ConocoPhillips surged 1.29% on the back of rising crude oil prices.
Chesapeake Energy also surged 4.06% amid reports the oil and gas giant is in advanced talks to sell pipelines to Global Infrastructure Partners for more than USD4 billion.
Meanwhile, shares in General Motors were up 1.13%, after Reuters reported that the company?s struggling European unit Opel emerged from its worst-ever sales crisis in Germany and now expects to gradually expand its slice of the market back into the double digits, a level not seen since 2005.
On the downside, Facebook saw shares tumble 2.31%, after JMP Securities started coverage of the social-networking giant with a "market outperform" rating and a USD37 price target.
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