- CNTV English - CCTV News

Homepage > News > Biz >

Wall Street ends first half of 2012 with broad rally

06-30-2012 09:04 BJT

NEW YORK, June 29 (Xinhua) -- Wall Street ended the fist half of the year with broad rally on Friday as market sentiment was boosted by the European Union's progress on tackling the region' s debt crisis.

When the market closed, the Dow Jones industrial average rallied 277.83 points, or 2.20 percent, to 12,880.09 while the Standard & Poor's 500 surged 33.12 points, or 2.49 percent, to 1, 362.16, posing their biggest gains since June 6.

The Nasdaq Composite Index soared 85.56 points, or 3 percent, to 2,935.05, its best day of the year.

With Friday's rally, all three major indexes were higher for the week and rallied nearly 4 percent for the month.

For the past six months, the blue-chip Dow gained 5.4 percent. The broader S&P 500 jumped 8.3 percent while the tech-heavy Nasdaq rallied 12.7 percent.

Friday's broad rally came after the EU summit ended with several concrete steps, short-term and long, trying to stem the continent's spiraling debt crisis.

Investors were especially pleased to hear that the eurozone's two bailout funds, known by their acronyms EFSF/ESM, will be able to recapitalize banks directly, rather than first handing over the money to the government of the country where they are based. The move was believed very effective in short term as it can stop banks from piling debt onto already stressed governments.

Meanwhile, the European Union decided to allow countries that comply with its budget policies to access the rescue funds to support their sovereign bond markets.

As an immediate result, Spanish and Italian government bond yields fell sharply, while safe-haven U.S. and German government debt suffered sell off.

Commodities also cheered the agreement in Europe, with oil prices soaring more than 9 percent in a single day, up from an eight-month low on Thursday.

Friday's U.S. economic data was mixed, but didn't have much influence on the market as the European news was taking the center stage.

The U.S. Commerce Department reported that consumer spending was flat in May, the first time in five months, while income rose 0.2 percent.

Other data showed that consumer sentiment hit a six-month low in June in the latest signs of trouble for the economy, while manufacturing activity in the Midwest picked up this month. After a roller coaster first half of 2012, many analysts warned that global financial markets are very likely to suffer more volatility in the coming months.

Not only will the situation in Europe continue to drive the market, strategists pointed out that the slowdown in the world's largest economy should get serious attention and the surprising rise in unemployment rate in May was a wake up call.

What's more, the U.S. economy will soon face another serious challenge, known as "fiscal cliff".

"It is unlikely that the cliff is fully priced into the markets, " said Ethan S. Harris, North American economist for Bank of America Merrill Lynch.

Harris recently prepared a lengthy analysis on the effects of the so-called fiscal cliff -- a term coined by Federal Reserve Chairman Ben Bernanke to describe the automatic financial triggers that would happen if Congress didn't reach a deficit-reduction agreement before the end of the year.

Harris predicted the fiscal cliff triggers would impose a total damage of closer to 720 billion dollars, or 4.6 percent of GDP on an already sluggish U.S. economy.


Editor:Bai Yang |Source: Xinhua

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program