High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email email@example.com to buy additional rights. FT.com / Markets / US - S&P 500 into positive territory for the yearBank stocks led a relief rally on Wall Street, as US investors cheered Europe’s deal on sovereign debt and strong US growth data.
Financial stocks in the S&P 500 surged 5.1 per cent, led by big commercial banks Citigroup, up 8.9 per cent to $33.90, JPMorgan Chase, up 8.3 per cent to $37, and Bank of America, up 7 per cent to $7.05. Investment bank Morgan Stanley also jumped 11.5 per cent to $18.50.
US banks were following their European counterparts up after Europe’s debt deal, which will impose 50 per cent losses on Greek bondholders, but set recapitalisation targets, and raised the firepower of the eurozone rescue fund, at least gave investors more information.
But the European deal did nothing to help MF Global, the broker-dealer which has been fighting for its life amid fears of heavy exposure to European debt. Shares fell by another 5.9 per cent to $1.60 on Thursday morning, the stock now down more than 50 per cent for the week.
US economic growth accelerated to an annualised 2.5 per cent in the third quarter, a strong improvement on the 1.3 per cent annualised growth posted in the second quarter, and a suggestion that the summer’s stock market woes were not immediately transmitted to the real economy.
FT.com / Markets / US - S&P 500 into positive territory for the year