NEW YORK: US stocks erased losses in the last hour of trade Wednesday to end mostly higher despite doubts that the EU summit Thursday and Friday will produce a credible solution to the eurozone crisis.
After trading down most of the day, the markets got a boost from a late report from the Federal Reserve showing consumer credit was growing at a 3.7 percent annual rate in October, another sign that US consumers are spending rather than hoarding their dollars.
The jump also came around the time Japan's Nikkei newspaper reported that the Group of 20 leading economies would put together $600 million to help Europe under the International Monetary Fund's administration -- a report subsequently denied by IMF.
The Dow Jones Industrial Average closed higher by 46.24 points (0.38 percent) at 12,196.37.
The more broad-based S&P 500 edged up 2.54 (0.20 percent) to 1,261.01, while the Nasdaq was essentially unchanged, slipping 0.35 points (0.01) at 2,649.21.
Traders were mostly focused on the coming EU summit in Brussels Thursday and Friday, as German officials sought to downplay expectations of a long-term deal on setting the finances of the 17-member single currency zone on a stable path.
After trading lower most of the day, though, the markets found news to push higher late in the session -- the Fed's data on consumer spending and the G20 report.
"The market reacted to the rumor that the G20 plans to lend the IMF $600 billion to save Europe," said Gregori Volokhine of Meeschaert.
"That would be the 'bazooka' that markets have been waiting a long time for."
"But it is not the first time that there has been this type of rumor coming out of the European crisis."
Banks rallied on the news: Morgan Stanley jumped 4.6 percent, Goldman Sachs 3.9 percent, and JPMorgan Chase 2.3 percent.
Netflix surged 5.6 percent after a confident presentation to analysts by chief executive Reed Hastings Tuesday that brushed off talk of a looming assault on its streaming movies business by powerful cellphone carrier Verizon.
Nasdaq-traded shares of Israel's Teva Pharmaceutical lost 0.15 percent after the government blocked its push to allow its so-called "morning after" contraceptive, "Plan B" to be sold freely to Americans under 17 years old.
Currently a prescription is required.
Bonds rallied. The yield on the 10-year Treasury fell to 2.02 percent from 2.09 percent on Tuesday, while the 30-year yield dropped to 3.04 percent from 3.11 percent.
Bond prices and yields move in opposite directions.
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