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US stocks rally on Spain plan, China stimulus hope

Updated: 2012-09-28 11:06
( Xinhua)

NEW YORK -- US stocks rallied on Thursday, snapping multi-day losing streak as market sentiment was boosted by Spain's new budget plan and hopes for further stimulus from China.

When the market closed, the blue-chip Dow Jones Industrial Average rose 72.46 points, or 0.54 percent, to 13,485.97, posting the first gain in five sessions. General Electric and Intel led the gainers.

The Standard & Poor's 500 Index gained 13.83 points, or 0.96 percent, to 1,447.15. The Nasdaq Composite Index rallied 42.90 points, or 1.39 percent, to 3,136.60.

Apple gained nearly 2 percent, breaking a three-day losing streak. And Google advanced to all-time highs as the search-engine celebrated its 14-year birthday.

Most key S&P sectors ended higher, led by technology and energy.

Stocks jumped right after Thursday's opening bell on speculations that the Chinese government may soon announce more measures to support the slowing markets, which had helped China's equities rebound from multi-year lows.

Gains extended later after the Spanish Cabinet approved the nation's 2013 budget and economic reform package. Under the new budget plan, the government will pass 43 new laws to reform the economy over the next six months, which was designed to end Spain's debt crisis, according to the government.

In a news conference following the cabinet meeting, Spanish government officials also asserted that Spain will meet its 2012 deficit target and 2013 will mark the end of recession, easing concerns over the ongoing debt woes in the region.

Economic news out of the United States was mixed, but signs of stronger hiring still boost investors' risk appetite, giving stocks another push.

US initial jobless claims dropped 26,000 last week, according to the Labor Department. The results were much better than the market's expectation, helping lift the market sentiment.

But the Commerce Department cut its estimates for economic growth rate in the second quarter to 1.3 percent from previous 1.7 percent. And a separate report from the Commerce Department showed durable goods orders tumbled 13 percent in August, steeper than 5 percent expected. It was the biggest drop since January 2009.

Pending home sales fell 2.6 percent in August, compared with expectations for flat growth. However, these data failed to set the tone for the market.

In the other markets, crude oil snapped multi-day losing streak and rallied sharply. The US crude rose 2.08 percent to settle at 91.85 dollars a barrel and Brent crude gained $1.97 to close at $112.01 a barrel.

The gold also surged $26.9 to settle at $1,780.5 per ounce. The dollar fell against most major currencies.