European stocks stage big gains
European stock markets staged a spirited rally this week, recovering from sharp falls a day earlier on reassuring economic data from the United States and positive corporate results.
Elsewhere there were gains of 1.29 percent in Madrid, 1.92 percent in Amsterdam, 2.13 percent in Brussels, 2.00 percent in Milan and 0.87 percent on the Swiss Market Index.
US stocks also raced higher Wednesday as investors shrugged off doubts about the pace of economic recovery and looked to a Federal Reserve policy announcement later in the day.
The Dow Jones Industrial Average was up 1.09 percent at 9,878.69 at mid-day while the Nasdaq composite had risen 0.68 percent to 2,071.32.
Bonds dropped. The yield on the 10-year US Treasury bond rose to 3.486 percent from 3.473 percent Tuesday and that on the 30-year bond increased to 4.346 percent from 4.337 percent. Bond yields and prices move in opposite directions.
Markets were focusing on the outcome of a two-day Federal Open Market Committee (FOMC) policy meeting. Most expected the central bank to hold its near-zero interest rate policy but were watching for any change in language that could indicate a so-called exit strategy from government stimulus measures.
"On recent FOMC days, the market has shown a propensity to trade with a positive bias ahead of the decision," said Patrick O'Hare at Briefing.com.
Fred Dickson at DA Davidson & Company said the market may be showing a delayed reaction to a huge investment in Burlington Northern Santa Fe railway by billionaire Warren Buffett on Tuesday.
The move "should provide a much-needed lift for investor confidence in the US economy and the stock market," he said.
In Europe, investors took heart from a report by a survey from payrolls firm ADP showing that the US private sector had shed 203,000 jobs in October, the seventh month in a row that employment declines were smaller than in the previous month.
A purchasing managers survey by the Institute of Supply Management said the US services sector, which makes up the bulk of the nation's economy, expanded in October for the second month running albeit at a slower pace.
European traders were likewise cheered by healthy earnings reports from key companies and from a decision by General Motors to scrap plans to sell its European unit Opel, citing an improvement in market conditions.
In Paris banks were in demand after Societe Generale reported net earnings that more than doubled in the third quarter.
Societe Generale shares shot up 4.80 percent, while those of rivals BNP Paribas and Credit Agricole gained 4.15 percent and 4.62 percent respectively.
On the London Stock Exchange sentiment was bolstered by an announcement from insurer Aviva that it could acquire the insurance activities of Dutch banking giant ING.
Mining companies drew strength from a new record -- 1,095.80 dollars an ounce -- for gold. Fresnillo rose 9.19 percent on the day.
In Frankfurt investors welcomed news from sportswear maker Adidas that its third quarter net earnings, while showing a 30 percent plunge, were nonetheless in line with market expectations. Adidas shares close 3.77 percent higher.
Tokyo's benchmark Nikkei-225 index closed up 0.42 percent earlier Wednesday, mirroring gains on other Asian markets.AFP / Expatica