U.S. stocks jumped from the opening as better economic news and more stable European markets encouraged investors to trade in safety for equities and better performance. And where just a day before the headlines spelled doom and gloom, yesterday’s pre-opening economic reports were all positive.
The latest ADP employment change data showed that private payrolls expanded by 93,000 in November versus an expected increase of 58,000, for the best improvement in payrolls in three years. The Q3 productivity report showed that non-farm productivity increased by 2.3%, up from Q2′s 1.9%, but just a bit off of the 2.4% expected. And construction spending increased 0.7% versus the consensus of a 0.5% decline.
The announced improvements in the U.S. economy had much to do with the opening rally, but even more buying came about as a result of better economic data from both Europe and China, and strong markets in both areas. Comments from European Central Bank President Jean-Claude Trichet seemed to stifle fears of more debt contagion in the euro zone.
The ECB said that it will take more assertive action focusing on the nations that are slower to participate in a recovery. At one point, a rumor spread that the U.S. Federal Reserve would also be coming to the aid of Europe, but that was later denied. (more)
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