US stocks rise on Europe crisis hopes
NEW YORK: US stocks opened higher Wednesday as investors shrugged off Slovakia's blocking an expansion of the eurozone rescue fund created in response to the bloc's debt crisis.
The Dow Jones Industrial Average rose 90.71 points (0.79 percent) to 11,507.01 by 1410 GMT.
The broader S&P 500 climbed 12.27 points (1.03 percent) to 1,207.81, while the tech-heavy Nasdaq Composite added 30.01 points (1.16 percent) to 2,613.04.
Slovakia's parliament voted down the expansion of the European Financial Stability Facility (EFSF) Tuesday after the close of US equities markets.
The move needs the support of all 17 eurozone parliaments; Slovakia was the only one to reject it.
"In spite of Slovakia's rejection of a bolstered eurozone bailout fund, investors are optimistic that the country will overturn the vote ahead of a summit of European Union leaders next week," said Andrea Kramer at Schaeffer's Investment Research.
Germany, the eurozone's largest economy, tried to reassure markets that the beefed-up EFSF, a key strategy to tackle the sovereign debt crisis that began in Greece, will be implemented this month.
The German chancellor, Angela Merkel, speaking to a business forum in Vietnam Wednesday, said that "the EFSF will be ratified at the October meeting," an apparent reference to the European Union's much-awaited summit on October 23.
The quarterly earnings season got off to a shaky start after the markets closed Tuesday, with aluminum giant Alcoa reporting disappointing third-quarter results. Alcoa shares slumped 4.7 percent to $9.81 early Wednesday.
But beverage and snack giant PepsiCo posted solid earnings in line with market expectations, sending its shares up 2.0 percent at $62.14.
The bond market extended Tuesday's losses. The yield on the 10-year Treasury advanced to 2.20 percent from 2.16 percent late Tuesday, while that on the 30-year Treasury rose to 3.18 percent from 3.11 percent.
Bond yields and prices move in opposite directions.
Copyright AFP (Agence France-Presse), 2011
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