U.S. stocks were extending the previous day's gains as investors cheered a better than expected reading on consumer confidence.
NEW YORK (TheStreet) -- Stocks were extending the previous day's gains as investors cheered a better than expected reading on consumer confidence.
The Dow Jones Industrial Average was rising 92 points, or 0.8%, at 11,615. The S&P 500 was up 11 points, or 0.9%, at 1203, and the tech-heavy Nasdaq was up 13 points, or 0.5%, at 2540.
"It's about time," said Miller Tabak chief economic strategist Andrew Wilkinson. "Consumers finally admitted that they are more jolly than not, lifting the headline index of confidence to its highest since July."
Consumer confidence improved to a reading of 56 in November, higher than the revised reading of 40.9 for October and representing the largest monthly increase since April 2003. Economist surveyed by Thomson Reuters were expecting a reading of 44 .
"Confidence has bounded back to levels last seen during the summer (July 2011, 59.2)," said Lynn Franco, director of the Conference Board's consumer research center. "Consumers' assessment of current conditions finally improved, after six month of steady declines....Consumers appear to be entering the holiday season in better spirits, though overall readings remain historically weak."
Consumer confidence data was strong enough to overshadow a weak read on home prices and the declaration of bankruptcy from American Airlines parent AMR(:AMR).
Home prices continued to fall during the third quarter according to the S&P/Case-Shiller home price index. The index rose 0.1% in September, but posted a year-over-year decline of 3.9% for the three month period. Economists expected the index to fall 3% year-over-year according to Thomson Reuters.
American Airlines and its parent AMR(:AMR) have filed for Chapter 11 bankruptcy protection and CEO Gerard Arpey has retired. The filing comes after the world's third-largest carrier reached a point when it seems unable, after five years of talks, to reach a contract deal with its pilots union. AMR shares were plunging 85%.
Sentiment was also getting a lift on signs that Europe is making progress in addressing its debt situation. European Union finance ministers are expected to agree on a plan today to expand the region's bailout fund. President Barack Obama on Monday pressured EU officials for more aggressive actions on resolving the debt crisis.
Confidence in the ability of European leaders to resolve the region's debt crisis appeared to be improving, with Italy selling 7.5 billion euros ($10 billion) of debt Tuesday. However, the country had to offer record high yields to do so. Italy sold three-year bonds at a 7.89% yield and 10-year bonds at a 7.56% yield.
Moody's said it could downgrade the subordinated debt of 87 banks across 15 countries on worries that governments wouldn't have the capacity to rescue them. Meanwhile, Standard & Poor's warned of a possible downgrade on the outlook on France's triple-A credit rating.
London's FTSE was rising 0.3% and Germany's DAX was higher by 0.5%. In Asia, Japan's Nikkei Average finished up 2.3% and Hong Kong's Hang Seng index closed up 1.21% .
In other corporate news, Thomas H. Lee Partners is interested in buying the U.S. operations of Yahoo(:YHOO), sources familiar with the matter told Reuters. THL is hoping to do a leveraged buyout of Yahoo!'s U.S. business, which could be worth $5 billion to $6 billion, and draw on its experience running other media assets such as Nielsen, Clear Channel and Univision to turn around the ailing company, the sources said. Yahoo! shares rose 2.1%.
AT&T(:T) has been working secretly on an 11th-hour deal to salvage its $39 billion merger with T-Mobile USA, The New York Times reported. AT&T is in talks with Leap Wireless(:LEAP) to sell it a big piece of T-Mobile's customer accounts and some of its wireless spectrum, the Times reported, citing people involved in the negotiations. AT&T shares were up 0.8%.
Research In Motion(:RIMM) shares were gaining 6.3% on news the company is branching out into security software for Apple(:AAPL) iOS and Android devices. The BlackBerry maker announced Mobile Fusion, which is intended to bring together its BlackBerry Enterprise Server technology and mobile device management system.
Netflix's(:NFLX) credit rating was lowered by Standard & Poor's on expectations the company will report a loss in 2012. S&P cut its assessment of Netflix's credit to 'BB-' from 'BB' and kept its outlook at stable.
"Our expectation is that escalating content commitments will lower profitability over the intermediate term, international expansion will have a greater impact on overall profitability, and a return of domestic subscriber growth could occur slightly later than we initially expected," S&P credit analyst Andy Liu said in a statement.
The stock was sliding 1.8%.
A federal judge rejected a proposed $285 million settlement between Citigroup(:C) and the Securities and Exchange Commission over a $1 billion mortgage-bond deal and ordered a fresh trial. In his order, Judge Jed Rakoff said the pact was "neither reasonable, nor fair, nor adequate, nor in the public interest." Citigroup shares rose 0.3%.
January oil futures were approaching the $100 mark, up $1.44 to $99.65 a barrel, and February gold futures were up $4.80 to $1,719.30.
The benchmark 10-year Treasury was falling 8/32, raising the yield to 2.003%. The U.S. dollar was falling against a basket of currencies, with the U.S. dollar index down 0.2%.
-- Written by Andrea Tse in New York.
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