Wall Street Kicking Amid Columbus Day Observance
US banks were closed for Columbus Day on Monday, holding the liquidity to a minimum, but Wall Street has managed to drive Dow Jones almost 300 points higher following assurances from the French and German leaders to beef up Europe’s banks.
The greenback (USD) exhibited falling stock-market prices on Monday morning trading as traders observed small decline in risk aversion following last week’s economic reports. The EUR/USD reached a 4-day high after completion of a long-term consolidation trend. The GBP/USD saw higher gains, with the US dollar almost reaching at par last week’s early high.
Traders showed pessimism about the week’s data that centered mostly on housing reports as most major banks were closed on holiday, including Bank of America, Capital One, CitiBank, Fifth Third, US Bank, Sun Trust, and PNC Bank, in observance of Columbus Day.
The Dow Jones Industrial Average climbed 276.10 points, or 2.49 percent, to 11379.06 as of 2:36 p.m. ET, the Standard & Poor’s 500 jumped 33.66 points, or 2.91 percent, to 1188.96 and the Nasdaq Composite soared 75.75 points, or 3.06 percent, to 2555.12.
Despite the sovereign debt crisis in Europe, Wall Street remains robust as the blue chips there continue to see increased triple-digit buying and robust gains in five sessions, putting them on track.
German Chancellor Angela Merkel and French President Nicolas Sarkozy recently vowed to solve the euro debt mess and shore up their banks before the end of October.
According to the leaders, they are close to a deal to recapitalize embattled European lenders, but fell short of laying out the details of their plans.
Europe’s worsening sovereign debt crisis has been hitting hard the stocks and growth around the world of late.
To level up efforts to get the crisis under control, France and Belgium were quick to sign an agreement to nationalize and break up municipal lender Dexia, which had almost fell to the pits of crisis due to its tremendous exposure to Greek bonds.
Under the deal, Dexia will be receiving $121 billion in state guarantees. The lender will sell its Belgium unit to the government for $5.4 billion.
On the other hand, Tech company stocks rallied in the U.S. as Apple (AAPL: 388.81, +19.01, +5.14%) announced a record 1 million iPhone 4S devices pre-orders in just a day while IBM (IBM: 186.62, +4.23, +2.32%) reached a new record high.
All 30 blue chis saw increased stock prices, with Bank of America (BAC: 6.28, +0.38, +6.44%) leading them, followed by JPMorgan Chase (JPM: 32.30, +1.60, +5.21%).
Commodities also soared high during the Columbus Day observance as crude oil climbed $2.43, or 2.93 percenet, to $85.41 and gold gained $35.00 a troy ounce, or 2.14 percent, to $1,674.40.
Yahoo! (YHOO: 15.84, +0.37, +2.39%) jumped 3 percent as co-founder Jerry Yang showed interest in teaming up with private-equity firms to put the struggling search engine under private ownership.
Bain Capital revealed interest in buying Yahoo! while Chinese Internet company Alibaba has held talks with Temasek in Singapore about buying the 40 percent investment held by Yahoo! itself.