US stocks book solid gains

NEW YORK: US stocks markets ended the pre-holiday week by booking solid gains Friday, after five sessions that saw trade marked by a rare slowdown in bad news from Europe and further evidence of a US recovery.

The major indexes began the week in the red amid lingering concerns that the European Central Bank would not step in to stop the eurozone rot.

But they managed to eke out solid gains by Friday's close.

While the Frankfurt-based central bank continued to shy away from backing indebted sovereigns, it did open lending windows for European banks, which helped ease panic.

"The signs are encouraging in Europe," said Hugh Johnson of Hugh Johnson Advisors. "There are some signs, not overwhelming, that things are starting to stabilise in Europe."

The Dow Jones Industrial Average finished up 3.6 percent to end the week at 12,294.00 points.

The Nasdaq was up 2.5 percent for the period and the S&P 500 added 3.7 percent for the week.

Stocks were helped by suggestions Tuesday of a nascent turnaround in the US housing industry, with new home starts up 9.3 percent in November from a year earlier to the best level since April 2010, when since-expired government tax credits were driving sales.

"The surge in sales... suggests the sector is beginning to wake from its long sleep; expect sustained gains in sales and starts ahead," said Ian Shepherdson of High Frequency Economics.

On Thursday US stocks scored solid gains on encouraging jobs market data.

Weekly claims for US unemployment benefits fell to the lowest level since April 2008 last week, the Labor Department said.

Data from Germany also set a more positive tone.

Germany's Ifo business sentiment index defied analysts' expectations and rose to 107.2 points in December from 106.6 in November.

"There can be no talk of a crash as in 2008," said Ifo president Hans-Werner Sinn.

Despite the run-up to Hanukkah and Christmas there was plenty of corporate news to keep traders busy.

AT&T saw its share price rise 3.5 percent after its planned mega-merger with T-Mobile was scrapped.

Oracle dragged the Nasdaq down on Tuesday, after reporting poor earnings, and ended the week down 10.8 percent.

The company missed analyst expectations for quarterly sales and profits in a rare slip, and said customers are more cautious and worried about economic growth.

On Monday General Motors plunged 5.5 percent after GM's former subsidiary Saab filed for bankruptcy.

But the automaker ended the week up 1.7 percent.

Shares of Mead Johnson Nutrition plunged 10.5 percent after reports suggested a possible link between its Enfamil infant formula and the death from a rare bacterial infection of a newborn boy.

On the Nasdaq, Akamai Technologies jumped 19.8 percent on the news that it would spend US$268 million to buy Cotendo for its cloud computing technology. - AFP