Stocks recorded their third big gain of the week and closed at a one-month high on Friday because of expectations that the central banks of countries around the world will step in to limit the damage from a debt crisis in Europe.
The Dow Jones Industrial Average climbed 115 points.
Now investors wait for a crucial election on Sunday in Greece that will help determine whether that country stops using the euro as its currency. Such an exit would destabilise financial markets.
Mario Draghi, president of the European Central Bank, said his institution stood ready to support Europe's banking system by continuing to lend money to solvent banks. He also appeared to leave open the possibility of an interest rate cut.
Draghi said in Frankfurt that the ECB has a "crucial role" in extending credit to banks in times of instability, when banks can't always borrow money on financial markets.
On Thursday, Reuters reported the ECB, the US Federal Reserve, the Bank of England and other global financial authorities were ready to act in concert to limit the fallout from Greece.
Investors also are more confident about the election itself, said Peter Tuz, a money manager, at Chase Investment Counsel, which runs mutual funds.
"There's a growing sense of optimism," he said. "The betting now is that the 'let's stay in the euro' segment of the population will win."
Borrowing costs for Spain were unchanged. They fell slightly for Italy, an indication that investors are feeling a little better about that country's solvency. They have been worried that Italy will have to seek financial rescue.
The Dow rose 115.26 points to close at 12,767.17, its highest finish since May 11. The Standard & Poor's 500 index climbed 13.74 points to 1,342.84, also its highest since May 11. The Nasdaq composite index rose 36.47 points to 2,872.80.
For the week, the Dow rose 0.9 per cent, the S&P one per cent and the Nasdaq 1.3 per cent.
The week included four moves of 100 points or more for the Dow, the first time that has happened since April:
- On Monday, the Dow lost 142 points as enthusiasm faded for a $US125 billion ($A125.2 billion) rescue of Spanish banks.
- On Tuesday, the Dow climbed 162 after a Federal Reserve official said he supported more measures to stimulate the economy.
- On Thursday, the Dow gained 155, primarily because of late reports about possible coordinated action by central banks.
Energy stocks rose the most Friday. OPEC oil ministers agreed Thursday to keep their production target steady, a compromise meant in part to soothe economically troubled countries.
A pair of weak economic reports helped push Treasury prices up and yields down.
A report on US factory production showed a drop in manufacturing, a key driver of economic growth. A gauge of manufacturing in New York sank to its lowest level since November.
The yield on the 10-year Treasury note fell to 1.60 per cent from 1.64 per cent Thursday. Traders have been shifting money into the safety of the Treasury market ahead of the Greek election. That higher demand has kept yields near all-time lows.
Among stocks making big moves:
- Microsoft rose 68 cents, or 2.3 per cent, to $US30.02 following reports that the company is in talks to buy Yammer, a developer of social networks within companies.
- Capital One Financial rose 80 cents, or 1.5 per cent, to $US53.81 after the company said uncollectable and delinquent loans at its credit card business dropped last month.
- Defence contractor AAR plunged $US1.23, or 10.6 per cent, to $US10.34. The company updated its forecast for fourth-quarter and fiscal-year earnings, and they were weaker than Wall Street expected.
- YPF, Argentina's state-controlled oil and gas producer, rose 72 cents, or 6.9 per cent, to $US11.17 after Mexican telecommunications billionaire Carlos Slim said he had acquired an 8.4 per cent stake in the company.
Money laundering cases tough, critical - Lubbock Avalanche-Journal
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McALLEN — When it comes to arresting drug traffickers and dismantling organized crime, the investigation into a U.S. horse racing operation allegedly laundering money for one of Mexico’s most powerful cartels is rare — and difficult to ...Lamenting the money chase while chasing money - Philadelphia Daily News
President Obama's voice echoed in the majestic rotunda of the Franklin Institute as he lit into the Republicans with fierce urgency.
"We want to move forward and make sure that elections aren't just about $10 million checks being written by folks who have vested interests in maintaining the status quo," Obama said, to applause. "The other side, they don't have any new ideas. . . . What they do have is, they'll have $500 million worth of negative ads."
In a note of irony common to modern politics, Obama was in the process of raising campaign cash while decrying its corrosive effects. Three events in the Center City science museum raised nearly $2 million Tuesday night for the president's reelection effort and Democratic committees supporting it.
And that was just after three similar events in Baltimore; by Thursday, Obama was at a star-studded gathering of donors in actress Sarah Jessica Parker's Manhattan home. The insurgent candidate of 2008 who promised to change our politics is now outpacing his modern predecessors in the amount of time raising money.
The people standing in front of the president beneath a marble statue of Benjamin Franklin had paid $250 to $2,500 to hear a fired-up stump speech. Meanwhile, in the Fels Planetarium, some 90 people waited for Obama to address them at a $10,000-a-ticket dinner. And earlier, about 15 people who had each pledged to raise or donate $40,000 got to sit at a table and talk privately with the president for 45 minutes.
"I was pleasantly surprised by the level of enthusiasm and the seriousness with which our donor base took this," said lawyer Kenneth M. Jarin, a cochairman of Obama's 2012 finance committee in Pennsylvania, who helped sell tickets. "They know what's at stake. People understand how much money is being spent by the other side, and that our side has to step up."
But all the hard work of Obama supporters in the months leading up to the Philadelphia events, overseen by Comcast executive vice president David L. Cohen, seemed puny the next day - when casino billionaire Sheldon Adelson gave $10 million to Restore Our Future, a "super PAC" helping Republican Mitt Romney.
Court and regulatory decisions in the last few years have led to unprecedented levels of money as corporations and wealthy individuals pledge to spend hundreds of millions, mostly in support of Republican candidates.
The amount of time presidents spend asking for cash has risen sharply in recent decades, according to Brendan Doherty, a political scientist at the Naval Academy and author of The Rise of the President's Permanent Campaign, to be published in July.
Obama has attended more fund-raising events in the second half of his first term than any of the last six presidents - 166 such events through Friday. In two years before Ronald Reagan's 1984 reelection, Reagan attended just three fund-raisers for the Republican National Committee, zero for his own campaign. Bill Clinton, once lionized and derided for his fund-raising prowess, attended 70 campaign-finance events in 1995 and 1996, when he was reelected.
Now, in the wake of the Supreme Court's 2010 Citizens United ruling, the sums flying around are enormous. Adelson and his wife have given $35 million this year, mostly to a super PAC that backed former House Speaker Newt Gingrich's presidential run.
"It's the Wild West, an entirely different dimension," said Larry Makinson, former head of the Center for Responsive Politics, a nonpartisan watchdog group. "The bottom line is, it magnifies the power of the 1 percent who've got all the money."
In a sense, Obama kicked off the latest installment of the political arms race in 2008 when he chose to spurn public financing for his campaign, Makinson said. Obama raised about $750 million and swamped the GOP.
This time, Obama got ahead of Romney, out-raising him $197 million to $87 million by March 31. But Romney's donations have outpaced the Democrats since he sewed up the GOP nomination. And that doesn't count super PACs' funds, where Republicans dominate.
People raising cash for Obama here say it is a little harder than four years ago, when the campaign to elect the first black president felt like a movement; one dinner at Cohen's home that year, for instance, raised $6 million. The weak economy has also hurt.
Still, enough donors are eager and able to write big checks. Among those at the $40,000 event, according to several attendees: Jarin; former State Sen. Connie Williams of Montgomery County; Cohen and his wife, lawyer Rhonda Cohen; developer Ron Rubin; Mark Alderman, a lawyer and cochair of Obama's state fund-raising committee; Joseph and Marie Field, who founded the radio broadcasting giant Entercom; and Richard Horowitz, president of RAF Industries, a Jenkintown private-equity firm.
Businesswoman Marsha Perelman attended the $10,000 dinner. She thinks Obama's approach to government, promising investment in education and other public goods, will be better "in the long run" for business than Romney's promises to slash regulations, government, and taxes.
As is customary, a few reporters were ushered in to record Obama's opening remarks. Then the press was shooed away as the president said he'd take questions.
Perelman, who chairs the Franklin Institute board, said Obama didn't drop any bombshells in the planetarium dinner, but it was still revealing.
"One of the questions asked referred to how difficult it is to get the president's message across," Perelman said. "He made a terrific reference to how hard it is to cut through a news cycle that is a nanosecond long: During the Bay of Pigs, President Kennedy did not announce the invasion until 13 days later. He had time to figure out what happened, and 70 percent of the nation tuned in when he went on television.
"President Obama said that if that happened today, within two minutes somebody would have tweeted about it. And the highest audience he ever gets for a speech, the State of the Union, is 10 percent of the population."
Contact Thomas Fitzgerald
at 215-854-2718, tfitzgerald@phillynews.com or @tomfitzgerald on Twitter. Read his blog, "The Big Tent," at www.philly.com/bigtent.
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