German ruling sparks rebound in US stocks

NEW YORK: US stocks rallied in early trade on Wednesday after a German court rejected an attempt to block Germany's participation in European bailouts, raising hopes of a resolution to Europe's debt crisis.

The Dow Jones Industrial Average jumped 151.29 points (1.36 percent) to 11,290.59 in the first 20 minutes of trade, a solid bounce after three consecutive days of triple-digit losses.

The broader S&P 500 climbed 18.05 points (1.55 percent) to 1,183.29, while the tech-heavy Nasdaq Composite gained 41.54 points (1.68 percent) to stand at 2,515.37.

In a highly anticipated ruling, Germany's Constitutional Court paved the way for German participation in a eurozone-wide bailout mechanism, removing an obstacle to rescues of Greece and other struggling European Union countries.

"While the court ruling was expected, it nonetheless produced a relief bid," said Patrick O'Hare, an analyst with Briefing.com.

Concerns about the eurozone's sovereign debt crisis, combined with jitters about a possible double-dip recession in the United States, have punished global stock markets in recent weeks.

The stock market also got a boost from shake-ups at two prominent companies, Yahoo! and Bank of America, which were welcomed by investors.

Yahoo! surged 6.6 percent after the unexpected firing late Tuesday of chief executive Carol Bartz, who had been struggling to turn around the beleaguered Internet giant amid fierce competition from Google and Facebook.

Bank of America jumped 3.2 percent after it unveiled a major reshuffle of its management team, including the ouster of two top executives.

Bond prices fell. The yield on the 10-year Treasury note climbed to 2.03 percent from 1.98 percent late Tuesday, while that on the 30-year bond rose to 3.33 percent from 3.24 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011