Global stocks and the euro rose today after nearly all European Union leaders agreed to build a closer fiscal union to address the region's debt crisis.
A Reuters report that said China planned a new $300 billion vehicle to invest in Europe and the United States also helped buoy investor sentiment. Led by Germany and France, 26 of the 27 nations in the European Union agreed after a two-day summit to pursue tighter integration with stricter budget discipline in the euro zone. Britain said it could not accept the proposed EU treaty amendments.
European shares advanced and Wall Street opened higher but Italian bond yields rose, up 9 basis points to 6.62 per cent. The euro was slightly higher at 1.3355.
"Some were hoping for a bigger deal, but we're seeing a lot more meat behind the effort with these measures," said Dennis Wassung, portfolio manager at Cabot Money Management in Salem, Massachusetts.
News that US consumer sentiment rose to its highest level in six months in early December on signs of better labour conditions and an improving economic outlook also lifted stocks. In other economic news, the US trade deficit narrowed in October to its lowest in 10 months, but imports from China hit a record high, a government report showed. The FTSEurofirst 300 index of top European shares was up 1.1 per cent at 983.86 points.
The Dow Jones industrial average was up 109.06 points, or 0.91 per cent, at 12,106.76. The Standard and Poor's 500 Index was up 11.77 points, or 0.95 per cent, at 1,246.12. The Nasdaq Composite Index was up 18.90 points, or 0.73 per cent, at
2,615.28.
Banks, which have been pressured by the uncertainty, rallied. The Financial Select Sector SPDR in New York rose 1.6 per cent to $13.04, while the Stoxx Europe 600 Banking Index rose 1.4 per cent to 133.59.
Brent crude oil steadied around $108 per barrel on news of the EU summit outcome and the Reuters report the new Chinese investment funds. ICE Brent futures rose 1 cent to $108.12 per barrel by 1.45pm, reversing an earlier $1 loss to a low of $107.11. US crude futures fell 5 cents to $98.29, after losing more than $2 on yesterday after the ECB news.
The benchmark 10-year US Treasury note was down 7/32 in price to yield 1.99 per cent.
Reuters
