What a difference a day can make.
A day after the Dow Jones Industrial Average (INDEX: ^DJI) notched its fourth consecutive decline, the U.S. index absolutely soared today, driven by positive July U.S. hiring data and strong commentary from European leaders in addressing the currency bloc's debt crisis.
American markets opened higher and never looked back. By day's end, the Dow had gained 217 points, or approximately 1.7%, to end the week a mere 0.1% higher. Likewise, the Nasdaq and S&P 500 each notched gains of 2% and 1.9%, respectively. Equally encouraging, the market's often-referred-to "fear gauge," or the VIX (INDEX: ^VIX) , retreated 9.9%%.
Back to the hiring news. U.S. payrolls increased by 163,000 in July after certain seasonal adjustments, well in excess of economists' average estimate of only 95,000. However, the unemployment rate also rose slightly to 8.3% during the month. In Europe, Spanish Prime Minister Mariano Rajoy buoyed investors' hopes, showing some openness toward requesting a formal bailout from the eurozone bailout fund for the heavily indebted sovereign. This came on the heels of commentary from European Central Bank chief Mario Draghi's comments yesterday that the ECB would be open to beginning purchases of Spanish debt if Spain requested financial assistance (read: a bailout).
Around the markets
European stock markets also took off on today's positive commentary, with the Stoxx 600 gaining 2.4%. Individual European stocks also surged. Embattled Spanish telecom Telefonica (NYS: TEF) halted its perpetual downward slide, gaining 6.9% today. Coming off an especially brutal month there the company said goodbye to its much-loved dividend and any share-buyback programs, investors who have hung around are in dire need of some good news. Today's moves hopefully provide some kind of boost. The rally wasn't limited only to stocks in peripheral European countries, though. Share of French telecom powerhouse France Telecom (NYS: FTE) also beat the averages today, jetting 5.2% during today's trading session.
On the earnings front, business social-networking site LinkedIn (NAS: LNKD) stole the show. In its most recent quarter, the company grew its top line by an astounding 89%. The company did, however, see a 38% dip in profits as a result of increasing costs and ongoing investments to build out its platform. The company also raised its full-year guidance. All this combined to shoot its shares 16% higher by day's end.
Foolish bottom line
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The article Why the Dow Surged Today originally appeared on Fool.com.
Andrew Tonner holds none of the stocks mentioned here. The Motley Fool owns shares of LinkedIn and France Telecom. Motley Fool newsletter services have recommended buying shares of France Telecom and LinkedIn. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.The Motley Fool has a disclosure policy.
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