Consumer confidence lifts share values higher

Dow Jones: 12,153.68 (+259.89) Nasdaq: 2,687.75 (+53.60) SP 500: 1,263.85 (+24.16)STOCKS RALLIED yesterday, preventing a second straight weekly decline for the Standard and Poor's 500 Index, and commodities climbed as US consumer confidence improved and Europe took steps to address its debt crisis.

Italy’s bonds gained and oil reached a three-month high.

The S&P 500 jumped 2 per cent in New York.

US equities extended an early rally after a gauge of consumer sentiment topped estimates in November, reaching the highest level since June and bolstering optimism before the holiday shopping season.

Italy’s senate approved debt-reduction measures, paving the way for a new government led by former European Union competition commissioner Mario Monti, while Greece swore in Lucas Papademos to head a unity government.

“It’s like investors hit the keystroke to risk on,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott.

“The European situation is seemingly coming to some closure and a decent consumer confidence report brought investors to risk assets,” he said.

The S&P 500 rose for a second day, adding to Thursday’s 0.9 per cent advance that was triggered by a drop in jobless claims and a retreat in Italian bond yields from records.

Financial shares, seen as vulnerable because of their exposure to European debt, ranked among the best performers.

Bank of America rose 3 per cent to $6.21, and JPMorgan Chase climbed1.7 per cent to $33.28.

Walt Disney gained 6 per cent to $36.70 to lead the Dow Jones Industrial Average higher after fourth-quarter earnings exceeded estimates on growth in cable TV and US resorts.

Alcoa also advanced at least 3.4 per cent, helping lead the Dow up 259.89 points, or 2.2 per cent, to 12,153.68.

The Thomson Reuters / University of Michigan preliminary index of consumer sentiment climbed to 64.2 this month, the highest since June, from 60.9 in October.

Advancers sharply outnumbered decliners on the New York Stock Exchange by a ratio of 6 to 1. – (Bloomberg/Reuters)