Stocks rise as markets look to central bank help
By MATTHEW CRAFT AP Business Writer June 15, 2012 2:56PM
FILE- In this Monday, June 11, 2012, file photo, Specialist Frank Masiello, left, and trader Glenn Kessler work on the floor of the New York Stock Exchange. Wall Street was on course to open higher Friday June 15, 2012, with Dow Jones industrial futures rising 0.4 percent to 12,650. S&P 500 futures gained 0.4 percent to 1,331.30. (AP Photo/Richard Drew, File)
NEW YORK (AP) — Expectations that central banks stand ready to head off a deeper European debt crisis helped push U.S. stocks higher on Friday. The European Central Bank president said the bank would continue its “crucial role” of making sure the financial system has enough cash.
Mario Draghi’s comment wouldn’t normally arouse much interest, but it followed a report Thursday from Reuters that central banks were ready to act in concert to stem any fallout from elections in Greece this weekend.
The Dow Jones industrial average rose 65 points to 12,717 as of noon Eastern. Microsoft was the Dow’s leading stock, rising 2 percent, following reports that the company is in talks to buy Yammer, a developer of social networks within companies. Microsoft gained 61 cents to $29.96.
All eyes are on Greece, where an election on Sunday could determine whether the country stays within the euro currency union. Analysts are concerned about what will happen if a party opposed to the terms of the country’s financial bailout takes control of the government. If Greece leaves the euro, many fear it could imperil Spain, Italy and other countries and further weaken the region’s hobbled banks.
“There’s a growing sense of optimism,” said Peter Tuz, a money manager, at Chase Investment Counsel, which runs mutual funds. “The betting now is that the ‘let’s stay in the euro’ segment of the population will win.” Investors are also reassured by reports that central banks have drawn up contingency plans.
Tuz, however, remains worried about the fallout from Greece leaving the euro. “There’s just too much uncertainty about what would happen, too many unknowns.”
The Standard & Poor’s 500 index gained seven points to 1,336. The Nasdaq composite gained 20 points to 2,856.
All 10 industry groups within the S&P 500 rose. The index, widely used by money managers as a benchmark, is up 0.8 percent for the week and on track for its second straight week of gains.
Among stocks making big moves:
— GameStop sank 3 percent, or 52 cents, to $17.22. The drop came after research firm NPD said sales of video games plunged 28 percent last month. That’s the sixth straight month that sales have dropped more than 20 percent.
— Capital One Financial rose 1 percent after the company said uncollectable and delinquent loans at its credit card business dropped last month. Capital One’s stock gained 67 cents to $53.68.
— IntercontinentalExchange jumped $5.51 to $134.37 after the financial markets operator lost out in the bidding for the London Metal Exchange to Hong Kong Exchanges and Clearing. The 4 percent gain was the most of any stock in the S&P 500 index.