U.S. stocks jump after Italy passes economic reforms
NEW YORK (AP) - Stocks rallied early Friday as new governments get ready to take over in Italy and Greece, the two countries at the center of Europe's debt crisis. Italy's Senate approved an economic reform bill, opening the way for Premier Silvio Berlusconi to step down.
The Dow Jones industrial average was up 201 points, or 1.7 percent, to 12,095 in the first half-hour of trading.
Walt Disney Co. jumped 6.4 percent in early trading, the biggest gain in the S&P 500. The company reported record annual profits and revenues after the market closed Thursday, thanks to stronger advertising sales at ESPN and the Disney Channel.
The S&P 500 rose 19, or 1.6 percent, to 1,259. The Nasdaq composite rose 31, or 1.2 percent, to 2,656.
Markets were pummeled Wednesday when Italy's borrowing costs spiked and talks to name a new Greek prime minister broke down.
After Italy's Senate passed the bill, world markets turned higher, the euro edged up and oil rose above $98 a barrel. Two-year Italian government borrowing costs dropped below 6 percent after topping 7 percent earlier in the week. The legislation still has to clear Italy's lower house. Berlusconi has pledged to leave office once the reforms are passed.
In Greece, a former central banker was sworn in as interim prime minister. Lucas Papademos took over a coalition government after a two-week political crisis that jeopardized the country's ability to continue receiving emergency loans.
In corporate news, D.R. Horton Inc. returned to a quarterly profit as more people bought houses. But the builder's earnings and revenue fell below what analysts had expected. D.R. Horton's stock dropped 1 percent in early trading.
Nordstrom Inc. also reported stronger quarterly profit late Thursday. But the retailer lowered its full-year profit outlook below what analysts expected. Its stock fell 1 percent in early trading.