Stocks mixed as traders await news from Europe
The Dow rose 46 points to close at 12196.37 as optimism about a European debt crisis summit rose and fell
Optimism about a European debt-crisis summit this week rose and fell on Wednesday, but U.S. stock indexes barely budged. The Dow Jones industrial average closed 46 points higher; the Nasdaq composite index fell a fraction of a point.
Hopes have been building that the summit, which begins Thursday, will produce a lasting solution to Europe's two-year-old debt crisis.
On Wednesday, French and German leaders sought to downplay those expectations. Traders have been hoping that European countries will link their budgets more closely and impose greater fiscal discipline on heavily indebted nations like Greece and Spain. Officials said Wednesday that a deal this week might include only some countries, and crafting a fuller plan might take until Christmas.
"The pattern has been get your hopes up, then be disappointed by EU summits, and that pattern has been in place for a while," said Steve Van Order, fixed income strategist at Calvert Investment Management.
The Dow rose 46.24 points, or 0.4 percent, to close at 12,196.37. Its biggest gains came from financial companies. JPMorgan Chase & Co. rose 2.3 percent, Bank of America Corp. rose 1.9 percent and insurance giant Travelers Cos. Inc. rose 1.8 percent. Machinery maker Caterpillar Inc. fell 1.1 percent, the most in the Dow 30.
The Standard & Poor's 500 index rose 2.54 points, or 0.2 percent, at 1,261.01. The Nasdaq composite index lost 0.35, or 0.01 percent, to 2,649.21.
The diminished hopes for a quick resolution to Europe's debt troubles pushed prices of U.S. government debt higher. The yield on the 10-year Treasury note fell to 2.03 percent from 2.09 percent late Tuesday.
Traders have been growing restless with the delays in getting a resolution to Europe's debt crisis. Rating agencies have warned of possible downgrades for nations using the euro if they do not quickly set a firm plan for solving the two-year-old ordeal.
In Europe, yields on Spanish and Italian government debt rose. That means investors are demanding higher returns because of fears that one of those nations might default. Borrowing costs for Spain and Italy had fallen sharply until Tuesday, having reached dangerously high levels a week earlier. European stocks were mostly lower. Germany's DAX fell 0.6 percent, Britain's FTSE 0.4 percent.