Wall Street stocks end six-week slide
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NEW YORK, Nov 23 AFP
November 24 2012, 09:37AM
US stocks have solidly snapped a six-week slide with gains topping three per cent, the best rise in five months.
In the holiday-shortened week, the Dow Jones Industrial Average jumped 3.35 per cent in four trading sessions to finish Friday at 13,009.68 points.
The tech-rich Nasdaq leaped 3.99 per cent to 2,966.85.
And the Standard & Poor's 500-stock index, a broad measure of the markets, gained 3.62 per cent at 1,409.15.
The Thanksgiving Day holiday that shuttered US markets Thursday and shortened the session Friday also gave a break to Congress ahead of negotiations with the White House on the fiscal budget.
Unless President Barack Obama and Democratic and Republican politicians can reach a compromise to avoid the fiscal cliff in January, the severe mandatory spending cuts and tax increases were predicted to tip the country back into recession.
"US stocks rallied this shortened trading week as optimism grew that a deal to avoid the fiscal cliff could be reached," said IHS Global Insight economists Paul Edelstein and Nigel Gault.
The week featured housing data that pointed to a recovery finally gaining traction in the depressed sector more than six years after the market crashed.
Federal Reserve chairman Ben Bernanke, in a speech Tuesday to the Economic Club of New York, warned that the looming fiscal cliff posed a "substantial threat" to US economic recovery.
On Friday stocks rallied sharply as consumers thronged to stores hunting for bargains on Black Friday, the traditional kick-off to the year-end holiday shopping season.
Consumer spending drives about 70 per cent of the economy's activity.
Consumers "seem enthusiastic enough" according to the latest numbers on household confidence, said Gregori Volokhine at Meeschaert New York.
"Next week Congress gets back in session, President Obama will be back in the White House (and) many people will be watching whether there is any development on the fiscal cliff talks," said Andrew Fitzpatrick at Hinsdale Associates.
In the week ahead, investors will keep an eye on a meeting Monday of eurozone finance ministers and other creditors of debt-ravaged Greece to see whether Athens will finally get its much-delayed instalment of bailout aid.
"That will be something important for Wall Street to study -- the sentiment is that work will get done on Monday," Fitzpatrick said.
The rest of the week will be packed with indicators because it is the last week of the month and will include data postponed by the Thanksgiving holiday, FTN Financial analysts noted.
Among them will be durable goods orders and consumer confidence on Tuesday, and the Fed's Beige Book report on economic conditions Wednesday.