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Dow jumps 213 points as US stocks rise

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Wall Street stocks have jumped following solid US economic data, joining European equity markets higher and ending a five-day losing streak.

The Dow Jones Industrial Average on Wednesday surged 212.88 points (1.23 per cent) to 17,584.52.

The broad-based S&P 500 gained 23.29 (1.16 per cent) at 2,025.90, while the tech-rich Nasdaq Composite Index bolted 57.73 (1.26 per cent) higher to 4,650.47.

The US trade deficit shrank sharply to its smallest size in nearly a year, while the private sector added 241,000 jobs in December, up from 227,000 in November.

Equity markets in Britain, France and Germany all rose after weak eurozone inflation data sparked speculation the European Central Bank will enact additional stimulus measures.

Heading into Wednesday, the S&P 500 had lost 4.2 per cent in the prior five sessions.

“We were pretty oversold,” said Michael James, managing director of equity trading at Wedbush Securities.

Department-store chain J.C. Penney jumped 20.3 per cent as comparable sales for the key holiday shopping period in November and December rose 3.7 per cent compared with a year ago.

The news also lifted other retail stocks. Dow member Wal-Mart Stores rose 2.7 per cent, Macy’s gained 4.1 per cent and Target advanced 3.8 per cent.

Pharmaceutical stocks gained. Dow member Merck rose 2.1 per cent, while biotech firms Biogen and Gilead Sciences advanced 5.6 per cent and 1.9 per cent, respectively.

Arena Pharmaceuticals soared 76.2 per cent after it released positive clinical data for a treatment for autoimmune disease. The results will enable the company to move into phase-two trials for some ailments.

Agricultural products giant Monsanto rose 1.3 per cent after fiscal first-quarter earnings came in at 47 US cents per share, above the 35 US cents projected by analysts.

Chipmaker Micron Technology lost 2.3 per cent after it offered a mixed outlook for the upcoming quarter. Morgan Stanley trimmed its earnings forecast for the second quarter by 10 US cents to 86 US cents per share based on Micron’s latest data.

Bond prices fell. The yield on the 10-year US Treasury rose to 1.96 per cent from 1.94 per cent Tuesday, while the 30-year advanced to 2.52 per cent from 2.50 per cent. Bond yields and prices move inversely.