Stocks rallied Friday, with the Dow Jones industrial average clearing the 12,000 mark, as American consumer confidence topped estimates and Italy’s approval of debt-reduction plans eased concern about Europe’s debt crisis.
The Dow Jones industrial average closed up 259.89, or 2.19%, at 12,153.68; the S&P 500 rose 24.16, or 1.95%, closing at 1,263.85; and the Nasdaq composite was up 53.6, or 2.04%, to close at 2,678.75. All numbers are preliminary.
“Things are starting to settle back in,” Philip Orlando, chief equity market strategist at Federated Investors, said in a telephone interview. His firm oversees about $355 billion. “The expectation was that Italy and Greece were going out of business. That was overdone. We’re going to see some necessary austerity measures put in place. In the U.S., the economic numbers have absolutely turned the corner and are starting to accelerate.”
Stocks extended their rally as the Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 64.2 this month, the highest since June. The median estimate of economists surveyed called for 61.5.
Earlier gains were driven by a drop in Italian bond yields as the nation’s Senate approved budget measures in a bid to allow for a new government. In Greece, Lucas Papademos, a former vice president of the European Central Bank, will be sworn in as premier of a unity government.