Stocks higher as China comes to Europe's rescue
The Dow jumped 162 points to end at 11869 following reports that China will aid Europe by investing in a financial rescue fund.
Agence France-Presse reported that China has agreed to invest in Europe's financial rescue fund, which will be used to support struggling countries and banks in the European Union. The Dow Jones industrial average jumped more than 100 points after the report came out in the early afternoon.
Stocks had been mixed for much of the day as investors weighed stronger earnings from Boeing and Corning with uncertainty about the outcome of a key meeting among European leaders.
Top European officials met in Brussels to discuss how to contain the region's debt crisis, which has festered for two years. One consideration is increasing the power of a financial rescue fund, which Germany's parliament approved shortly before U.S. stock markets opened.
European officials announced a plan after the U.S. market closed that will require the region's banks to increase their levels of cash to better protect themselves from losses on the Greek bonds they hold. European governments have been pressing the banks to forgive significant amounts of the Greek government's debt.
The Dow Jones industrial average gained 162.42 points, or 1.4 percent, to 11,869.04. Boeing Co. led the way. It rose 4.5 percent after it reported a bigger profit for its latest quarter than analysts expected. It also raised its forecast for 2011 earnings.
The S&P 500 index rose 12.95, or 1.1 percent, to 1,242. The Nasdaq composite added 12.25, or 0.5 percent, to 2,650.67. Amazon.com Inc. slumped 12.7 percent after reporting a 73 percent drop in income. The retailer cited higher costs for expansion.
Strong economic reports also helped send stocks higher. Businesses ordered more heavy machinery and other long-lasting manufactured goods last month, after excluding aircraft orders, which can be volatile. That indicates businesses are still spending on equipment despite worries about a weak economy and Europe's debt problems. Sales of new homes rose in September after falling for four straight months. Lower home prices enticed buyers.
The yield on the 10-year Treasury note rose to 2.21 percent from 2.14 percent late Tuesday as demand diminished for assets perceived to be relatively safe.
Corning Inc. rose 3 percent after reporting a 3 percent increase in income last quarter on stronger sales of glass for flat-panel televisions. Its earnings and revenue beat analysts' expectations.
First Solar Inc. rose 6.6 percent. It reported results a week earlier than expected, and revenue and earnings both improved. That helped the stock recover some of its losses from Tuesday, when it fell 24 percent after the surprise departure of the company's chief executive.
Five stocks rose for every one that fell on the New York Stock Exchange. Volume was slightly above average at 4.8 billion shares.