Wall Street rises after strong data, Obama to speak
By Rodrigo Campos | November 10, 2012 3:14 AM EST
Stocks bounced higher on Friday as buyers stepped in following two days of steep losses after data showed confidence among consumers and wholesale business inventories were stronger than expected.
Consumer sentiment rose to its highest level in more than five years in November, according to the Thomson Reuters/University of Michigan preliminary index of sentiment, indicating Americans felt more optimistic about employment prospects and the outlook for the overall economy.
Still, markets remained concern about the widening euro zone crisis and the looming "fiscal cliff."
The so-called fiscal cliff would begin early next year and unless Congress acts to change the law before then, experts warn the economy could tip into recession.
Obama's statement is scheduled for 1:05 p.m. (1805 GMT).
The bounce-back in stocks is "a little bit of a realization the selloff is overdone, but it doesn't mean it won't continue," said John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York.
The Dow Jones industrial average <.DJI> rose 22.28 points, or 0.17 percent, to 12,833.60. The S&P 500 <.SPX> gained 6.52 points, or 0.47 percent, to 1,384.03. The Nasdaq Composite <.IXIC> added 18.65 points, or 0.64 percent, to 2,914.24.
"The market is trying to send a very strong signal," Manley said. "Any action that does not deal with the issues in front of us will be punished by the market."
U.S. wholesale inventories rose in September by the most in nine months, the government said, in the latest sign the economy grew more than initially estimated in the third quarter.
Growth in Germany, Europe's largest economy, is likely to weaken in the next two quarters as firms postpone investments while France's central bank said it expected the euro zone's second-largest economy to slip into recession as 2012 ends.
Greece is fast running out of cash while it awaits the next tranche of its 130-billion euro international bailout that is keeping it afloat, a deputy finance minister said on Friday.
The euro dipped below $1.27 to hit a fresh two-month low against the U.S. dollar.
"Europe's no picnic either," Manley said. "Greeks are having an enormous problem with their debt and ... Europe is slowing down no question about it."
The S&P 500 closed Thursday below its 200-day moving average for the first time in five months, a bearish technical signal that could keep stocks under pressure.
On another bullish note, Chinese data for October showed infrastructure investment accelerated and factory output ran at its fastest in five months.
(Editing by Kenneth Barry)
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