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U.S. stocks rose, paring an earlier rally, as concerns about Europe’s debt crisis overshadowed an unexpected decline in the American unemployment rate. Benchmark indexes trimmed gains as the euro and Italian bonds erased earlier advances.
The benchmark index for American equities is little changed for 2011 after rebounding more than 13 percent from its low for the year on Oct. 3. Improving U.S. economic data has helped alleviate concern that the world’s largest economy will relapse into a recession as Europe’s debt crisis threatens to derail the recovery.
Today’s jobs data showed that payrolls climbed 120,000, with more than half the hiring coming from retailers and temporary help agencies, after a revised 100,000 rise in October that was more than initially estimated. The median estimate in a Bloomberg News survey called for a gain of 125,000. The jobless rate declined to 8.6 percent, the lowest since March 2009, from 9 percent, Labor Department figures showed.
The IMF said today it will need more resources to fight Europe’s debt crisis if market conditions worsen. The S&P 500 has rallied this week as the Federal Reserve and five other central banks lowered the cost of dollar funding and China cut the proportion that banks need to hold as reserve capital.
Equity futures rose earlier following a report that as much as 200 billion euros ($270 billion) of national central bank loans may be channeled through the IMF. Germany and France are pushing for closer economic ties among euro-area nations and tougher enforcement of budget rules to counter the region’s debt crisis.
Dow 12,038.04 +18.01 +0.15%, Nasdaq 2,634.36 +8.16 +0.31%, S&P 500 1,248.44 +3.86 +0.31%
Financial stocks posted the largest gains out of 10 groups in the S&P 500, climbing 2.1 percent. JPMorgan surged 7.9 percent, the biggest rise in the Dow, to $32.87, while Morgan Stanley rallied 7.1 percent to $15.54.
Investors purchased corporations most tied to the economy, as industrial and energy companies advanced while utility stocks dropped 0.7 percent. Alcoa Inc. (AA) added 1.1 percent to $9.92 and General Electric Co. (GE) rose 1.9 percent to $16.21.
Western Digital jumped 8 percent to $31.58. The disk-drive maker raised its quarterly revenue forecast after sales rebounded from a flood in Thailand that devastated factories and constrained supplies.
Elsewhere, Zynga Inc. is seeking to raise as much as $1 billion in the biggest initial public offering by a U.S. Internet company since Google Inc. The company is offering 100 million shares for $8.50 to $10 apiece, according to a regulatory filing today. The high end of the range would value San Francisco-based Zynga, the biggest developer of games for Facebook Inc., at $7 billion.
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