Wall Street advances for 4th day, banks up on ECB moves

NEW YORK: US stocks rose for a fourth straight session on Thursday after major central banks moved to boost European bank funding and regional leaders offered strong support for Greece, easing default fears.

In the last four days, the S&P 500 has risen 3.9 percent, while the Dow is up 3.3 percent and the Nasdaq is up 4.9 percent.

Financial stocks were among the top gainers, with the S&P financial sector index up 1.5 percent. Among individual stocks, Bank of America Corp rose 1.7 percent to $7.17 and JPMorgan Chase & Co was up 1.8 percent to $33.39.

The European Central Bank (ECB) along with other major central banks will reintroduce three-month dollar liquidity operations in the fourth quarter.

The move was seen as good for the European banking system, which has experienced renewed stress in finding dollar funding due to growing distrust between lenders amid the region's sovereign debt crisis.

"We've been taking our cues from Europe lately, and today is no exception. With Europe comfortable with what the ECB is doing, we're comfortable too," said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group in Greenwich, Connecticut.

The Dow Jones industrial average was up 131.35 points, or 1.17 percent, at 11,378.08. The Standard & Poor's 500 Index was up 12.85 points, or 1.08 percent, at 1,201.53. The Nasdaq Composite Index was up 19.63 points, or 0.76 percent, at 2,592.18.

The move by the central banks offset weaker US economic reports showing new weekly jobless claims hitting their highest level since late June and a gauge of New York state factory activity contracting in September.

Also, manufacturing activity in the US Mid-Atlantic region contracted for a second month in a row.

US-traded shares of Switzerland's UBS AG shed 11 percent to $11.23 after the bank said it discovered unauthorized activity by a rogue trader that led to a loss of some $2 billion.

Netflix Inc slumped 15 percent to $177.53 after it cut its third-quarter subscriber outlook, citing a price increase that spurred customers to shy away from its DVD-only service.

Widespread optimism over containing the debt crisis came even as German Chancellor Angela Merkel rejected the idea of euro zone bonds as a solution.

A top official said he expects lenders to recommend the release of a vital next tranche of aid to Greece, warding off the threat of an imminent default.

About 59 percent of companies traded on the New York Stock Exchange were in positive territory, while the number of winners slightly outnumbered decliners on the Nasdaq. Trading volume was below average.

Copyright Reuters, 2011