In this Nov. 28, 2011 photo, trader Stephen Perciballi, left, works on the floor of the New York Stock Exchange. Asian stock markets climbed Tuesday, Nov. 29, 2011, amid hopes that radical steps are being considered to choke off a debt crisis threatening to rip apart the euro currency union, but European shares opened lower as the euphoria began to fade.(AP Photo/Richard Drew)
In this Nov. 28, 2011 photo, trader Stephen Perciballi, left, works on the floor of the New York Stock Exchange. Asian stock markets climbed Tuesday, Nov. 29, 2011, amid hopes that radical steps are being considered to choke off a debt crisis threatening to rip apart the euro currency union, but European shares opened lower as the euphoria began to fade.(AP Photo/Richard Drew)
NEW YORK (AP) ? A jump in U.S. consumer confidence sent stocks mostly higher Tuesday. Investors were also encouraged by new efforts from European leaders to find more aggressive cures for the region's debt crisis. The Dow Jones industrial average and S&P 500 index rose 0.5 percent in afternoon trading. Technology stocks lagged.
Stocks started slightly higher and gained momentum after 10 a.m., when the Conference Board, a private research group, reported that its Consumer Confidence Index jumped in November to its highest level since July. That news and strong retail sales over the Thanksgiving weekend reassured investors that the U.S. economy might be sputtering back to life, said Quincy Krosby, market strategist for Prudential Financial.
"For the market, the fact that Americans are spending is a positive force."
Europe's proposals for wriggling out of a potential financial catastrophe have become more radical as borrowing costs for the region's large economies, including Spain and Italy, spike. President Barack Obama said in a meeting with top EU officials Monday that if Europe failed to solve its crisis, the U.S. economy would suffer.
Acting with new urgency, Europe's finance ministers were considering wide-ranging plans for protecting the region's financial system and shared currency from collapse. Many of those ideas would have been off-limits only recently, including having countries cede some control over their finances to a central European authority.
In the latest sign of trouble, Italy was forced to pay an excruciatingly high interest rate on an auction of three-year debt Tuesday. Demand was strong, but the 7.89 percent rate was nearly three percentage points higher than last month, an enormous increase.
The ease with which the auction was able to raise 7.49 billion euros ($10 billion) was a good sign, said Krosby. "But it's still worrisome that those yields are past the point which a week ago would have terrified global markets."
Bank stocks lagged the market as investors saw the latest jump in Italy's borrowing costs as a troubling sign for the global financial system. Banks could suffer huge losses in the event of a financial panic in Europe and a freeze-up in global lending markets. Morgan Stanley fell 3.2 percent and Bank of America fell 2.6 percent.
AMR Corp. plunged 80 percent after the parent company of American Airlines said it would file for Chapter 11 because it could no longer shoulder rising fuel costs and its heavy debt load. Competitor United Continental Holdings Inc. jumped 6.4 percent, and Delta Air Lines Inc. rose 3 percent. AMR Corp. has continued to lose money while other U.S. airlines returned to profitability in the last two years.
The Dow Jones industrial average rose 60 points, or 0.5 percent, to 11,583 at 3:45 p.m. Eastern.
The Dow jumped 291 Monday on expectations that European leaders were moving more aggressively to prevent the region's debt crisis from causing a catastrophic breakup of their currency union. European finance ministers gathered Tuesday to hash out the latest ideas for squelching the crisis. At their regular monthly meeting, the ministers also released the latest installment of emergency loans for Greece.
The Standard & Poor's 500 index rose 5, or 0.4 percent, to 1,197. The S&P broke a seven-day losing streak Monday. The Nasdaq composite, comprising mostly technology stocks, slipped 6 points, or 0.3 percent, to 2,520.
Many tech stocks fell, led by Corning, which lost 11.3 percent. The maker of glass for products like LCD televisions cut its outlook for the fourth quarter, saying a major South Korean customer would no longer do business with the company. Netflix fell 3.4 percent after Standard & Poor's lowered its rating on the company's debt, saying it expected losses.
Seagate Technology PLC jumped 4.3 percent after the hard drive maker forecast revenue for the current quarter that was higher than analysts were expecting. Citi analyst Joe Yoo said higher hard disk drive prices were driving the gain.
Tiffany & Co. plunged 8.9 percent after the luxury retailer forecast fourth-quarter earnings that were below Wall Street's expectations. The fourth quarter includes the holiday shopping season.
Dillard's Inc. slumped 6.6 percent after a Sterne Agee analysts cut his rating on the stock, saying the department store operator's profits could be pressured by an increased in markdowns and sluggish economic conditions.
Associated Press
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