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U.S. stocks rally on upbeat housing data; Dow Jones up 1.97%

Published 12/20/2011, 10:10 AM
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Investing.com - U.S. stocks rallied on Tuesday, as market sentiment found support after better-than-expected U.S. housing data and concerns over the debt crisis in the euro zone eased.

During early U.S. trade, the Dow Jones Industrial Average surged 1.97%, the S&P 500 index jumped 2.11%, while the Nasdaq Composite index climbed 2.10%.

Sentiment was boosted after the U.S. Census Bureau said in a report that building permits rose to the highest level since March 2010 last month, while housing starts climbed to a 19-month high.

Home builder stocks jumped after the upbeat data with shares in Lennar soaring 4.81% and Beazer climbing 5.66%.

The report came after a sharp rise in German business sentiment and as Spain saw borrowing costs fall sharply at an auction of three and six-month government bonds.

U.S. lenders posted sharp gains, tracking their European counterparts higher. Bank of America advanced 2.87%, a day after seeing its share price slip below the critical USD5 level as concerns grew over how the banks could withstand European contagion.

Meanwhile, shares in JPMorgan surged 3.36% and Citigroup jumped 2.90%, while Goldman Sachs posted a 0.63% gain. Investment bank Jefferies was also higher with shares soaring 5% after reporting higher-than-expected earnings.

Elsewhere, Lockheed Martin jumped 2.06% as the group’s F-35 jet was chosen by Japan as its next mainstay fighter, deciding to buy 42 of the planes.

AT&T added 0.57% after the telecommunications giant announced late on Monday it was ending its deal to buy Deutsche Telekom's T-Mobile U.S. after opposition from the U.S. government.

The news sent competitors SprintNextel and Clearwire sharply higher with shares soaring 2.31% and 2.46% respectively.

On the downside, software company Red Hat plummeted 7.38% following a disappointing earnings report.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 soared 2.07%, France’s CAC 40 jumped 2.20%, Germany's DAX climbed 2.77%, while Britain's FTSE 100 added 0.62%.

During the Asian trading session, Hong Kong's Hang Seng Index slumped 0.35%, while Japan’s Nikkei 225 Index gained 0.5%.


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