The Dow Jones Industrial Average rose 102 points, 0.8%, to finish at 12,170. The blue-chip index was down a little more than 60 points at its worst levels of the day before swinging into positive territory in the afternoon.
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Again, a fresh batch of headlines from Europe drove the market action. The S&P 500 closed up 15 points, or 1.2%, at 1276, and the Nasdaq rose 32 points, or 1.2%, to settle at 2727.Investors are taking Berlusconi's promise to resign as a sign that Italy may get back on track in resolving its debt problems. Italy will probably vote next week on austerity measures in a new budget bill. If Berlusconi does step down as he says once the budget law passes, investors will be looking for clarity on new leadership for Italy.Berlusconi had faced increasing pressure to step down in the past few days. Stocks weakened earlier in the day on worries he might try to stick things out after securing a small victory on one legislative front but losing on another. The leader's center-right ruling coalition garnered 308 votes to pass a budget measure, but lacked the remaining eight votes required for a clear majority in the lower house. Political maneuvering in Italy has driven the country's bond yields to record highs since the country joined the euro. "If things are getting better, you would think that the Italians yields would be coming down and investors would be comfortable buying," said Channing Smith, managing director at Capital Advisors. "That's one fly in the ointment that not heading out [any time soon]."Meanwhile, patience for Greek leaders to prevent a bankruptcy in their country was growing thin. On Tuesday, the country had not yet decided on a new interim prime minister. Instead, talks between Greece's two largest political parties dragged on Tuesday without word on when they would reach a consensus. Investors are hoping that a unity government will help Greece secure a new €130 billion ($179 billion) European rescue package to ward off a default in the near term."Markets appear to have entered a period of indecision, as it appears seemingly unending data points from Europe are balanced with some structural investment management trends," said James Dailey, portfolio manager at TEAM Asset Strategy Fund. Dailey also said many investment managers who may be trailing their benchmarks for 2011 fear missing out on a possible year-end upside in riskier assets."This creates a manic environment in which longs and shorts are very nervous and subject to whipsawing. Today's stock market is a microcosm of this indecision and whipsawing, as prices churn within a range on relatively low volume. At some point, the churning is likely to end with either a breakout or breakdown, but until then the manic swings continue."
1 2 Next › Last »Earlier, London's FTSE rose 1.03% and Germany's DAX gained 0.55%. Japan's Nikkei Average fell 1.3% and Hong Kong's Hang Seng was unchanged.
In corporate news, Dynegy(DYN) shares rebounding by 27%. The Houston-based energy company reached a deal with some bondholders to restructure $1.4 billion in debt after subsidiaries of the company filed for bankruptcy protection.
Toyota(TM) fell 1.3% after the Japanese automaker said fiscal second-quarter earnings fell 18.5% to 80.4 billion yen ($1 billion) due in part to supply shortages after Japan's earthquake and tsunami in March.Priceline.com(PCLN) gained 8.6% after handily beating Wall Street expectations for its third-quarter results. The online travel booking company posted earnings of $512.6 million, on revenue of $1.45 billion, up more than 45% from the same period a year earlier.Hewlett-Packard(HPQ) slipped 0.1% after Reuters reported that the company is looking to sell its Palm's webOS mobile software platform. The unit, attractive for its patents, could go for hundreds of millions of dollars, but less than the $1.2 billion that HP paid for it last year. According to the news report, several technology companies -- including Amazon(AMZN) and Research In Motion(RIMM) -- have expressed an interest in buying.The December crude oil contract settled up 1.3% at $96.80 a barrel. Elsewhere in commodity markets, gold for December delivery was up $8.10 to $1799 an ounce.The benchmark 10-year Treasury was slipping by 13/32, pushing the yield to 2.08%. The dollar was down 0.5% against a basket of currencies.
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