US stocks markets ended the pre-holiday week by booking solid gains on Friday, after five sessions that saw trade marked by a rare slowdown in bad news from Europe and further evidence of a US recovery.
The major indices began the week in the red amid lingering concerns that the European Central Bank would not step in to stop the eurozone rot.
However, they managed to eke out solid gains by Friday’s close.
While the Frankfurt-based central bank continued to shy away from backing indebted sovereigns, it did open lending windows for European banks, which helped ease panic.
“The signs are encouraging in Europe,” Hugh Johnson of Hugh Johnson Advisors said. “There are some signs, not overwhelming, that things are starting to stabilize in Europe.”
The Dow Jones Industrial Average finished up 3.6 percent to end the week at 12,294.00 points.
The NASDAQ was up 2.5 percent for the period and the S&P 500 added 3.7 percent for the week.
Stocks were helped by suggestions on Tuesday of a nascent turnaround in the US housing industry, with new home starts up 9.3 percent last month from a year earlier to the best level since April last year, when since-expired government tax credits were driving sales.
“The surge in sales ... suggests the sector is beginning to wake from its long sleep; expect sustained gains in sales and starts ahead,” Ian Shepherdson of High Frequency Economics said.
On Thursday, US stocks scored solid gains on encouraging jobs market data.
Weekly claims for US unemployment benefits fell to the lowest level since April 2008 last week, the US Department of Labor said.
Data from Germany also set a more positive tone.
Germany’s Ifo business sentiment index defied analysts’ expectations and rose to 107.2 points this month from 106.6 last month.
“There can be no talk of a crash as in 2008,” Ifo Institute president Hans-Werner Sinn said.