Stocks rose sharply Thursday after Ireland moved closer to addressing its debt crisis, better-than-expected economic data suggested the recovery is accelerating and General Motors (GM) returned to the New York Stock Exchange (NYX) with a massive initial public offering.
The blue-chip Dow Jones Industrial Average ($INDU) jumped 173 points, or 1.6%, to close at 11,181, clawing back most of its nearly 200-point loss since Monday. The broader S&P 500 ($INX) rose 18 points, or 1.5%, to finish at 1,197. The tech-heavy Nasdaq Composite ($COMPX) leaped 38 points, or 1.6%, to close at $2,514 . Thursday marked the biggest single day of gains for the Dow and the S&P 500 since Nov. 4
Increasing confidence that Ireland will accept some sort of rescue package from the European Union and International Monetary fund lifted the euro at the expense of the dollar. As has been the correlation for months, a falling dollar boosted stocks and commodities -- a reversal of the two-week trend that's sliced 400 points off the Dow since early November.
Intel as the Rare Downer
The U.S. Dollar index, which measures the greenback against a trade-weighted basket of six major currencies, slid another 0.6%. The hardest-hit sectors earlier in the week were Thursday's biggest gainers on the falling dollar. Basic materials led all sectors, while capital goods and energy stocks were also robust. Aluminum giant Alcoa (AA) and heavy-equipment maker Caterpillar (CAT) were among the blue-chip average's best performers. Intel (INTC) was the only one of the 30 Dow stocks to close lower.
A couple of key economic releases helped the bulls Thursday. Manufacturing activity in the Philadelphia surged to its highest level in nearly two years. The Philadelphia Federal Reserve's regional outlook showed strong gains in new orders, shipments and price increases, as its Philly Fed index jumped to 22.5 in November from 1 in October, the highest reading since December 2009. Economists surveyed by Bloomberg expected the index to rise to just 5.6 in November.
Separately, the Conference Board's index of leading economic indicators -- a gauge of future economic activity -- suggested the economy could see a "mild pickup" this spring. October's reading rose 0.5%, and September's index was revised up from the initial estimate of 0.3% to 0.5%.
A Good First Day for GM
Adding to the buoyant mood was General Motors (GM) historic return to the stock market Thursday with what's shaping up to be the largest initial public offering in history. After a two-year odyssey that brought the iconic automaker through bailout and a return from bankruptcy, GM sold about 478 million shares for $33 a share, raising at least $18 billion Thursday.
Throw in the value of preferred shares and other options, and the IPO is likely to reap a global record of at least $22.7 billion. GM returned return to the New York Stock Exchange (NYX) under its old ticker, GM. Shares gained 3.2% to close at $34.05 on their first day of trading.
The dollars slide also reversed the recent tumble in commodities. Gold for December delivery rose $15.30, or 1.1%, to settle at $1,352 an ounce on the Comex division of the New York Mercantile Exchange (CME). Oil for December delivery rose $1.63, or 2%, to close at $82.07 a barrel on the Comex.