Stocks soar after big holiday shopping weekend

Updated 2h 19m ago

NEW YORK (AP) – A strong start to the U.S. shopping season and fresh proposals for a far-reaching solution to Europe's debt crisis sent stocks sharply higher Monday. The Dow Jones industrial average rose nearly 300 points, making up more than half of the ground it lost last week.

Retail stocks jumped Monday after a record number of shoppers bought gifts over Thanksgiving weekend, a make-or-break time for many retailers. For the past six years, Black Friday has been the biggest retail sales day of the year.

The retail numbers add to a growing set of indicators, including steady drops in the number of applications for unemployment, that suggest the U.S. is not as close to falling back into a recession, which economists had begun to fear in August.

"This goes in stark contrast to the gloom and doom that had been over markets," said Rob Lutts, president of Salem, Mass.-based investment firm Cabot Money Management. "A lot of the stocks I follow have been more oversold than any time I can remember in the last few years."

The benchmark Dow rose 291 points, or 2.6%, to 11,523. The index plunged 564 points last week on fear that Europe's debt crisis was spreading to large countries like Spain and even Germany. Aluminum products maker Alcoa (AA) jumped 51 cents to $9.46, or 5.7%, the biggest percentage move of the 30 stocks in the Dow.

The Standard & Poor's 500 rose 33 points, or 2.9%, to 1,192. The rally lifted stocks across the board. Only four stocks in the S&P 500 index fell.

The Nasdaq composite rose 85 points, or 3.5%, to 2,527.

Markets in Europe also rose sharply Monday as leaders there discussed new approaches for containing the region's debt troubles. One plan calls for Europe's most stable economies jointly to sell bonds that would assist the region's most indebted members, like Greece and Portugal.

Investors are hoping that the intensifying deterioration in the debt crisis will finally get Europe's leaders to agree on a package of measures that would ease market concerns over whether the euro currency itself can survive.

Stock indexes in Italy, Germany and France rose more than 4% Monday. The euro and commodities prices also rose. The yield on the 10-year Treasury note rose to 1.98% from 1.97% late Friday as investors sold ultrasafe assets to venture into riskier securities.

Banks had some of the biggest gains as investors became less fearful of an imminent freeze-up in Europe's financial system. Morgan Stanley jumped 4.1% and JPMorgan Chase rose 2.4%.

Retailers also rose sharply. Macy's rose 4.7% and Best Buy rose 3.4%.

A record 226 million shoppers visited stores and websites during the four-day holiday weekend starting on Thanksgiving Day, up from 212 million last year, according to early estimates by The National Retail Federation released on Sunday. They spent more, too: The average holiday shopper spent $398.62 over the weekend, up from $365.34 a year ago.

It's still unclear whether retailers' will be able to hold shoppers' attention throughout the remainder of the season, which can account for 25 to 40 percent of a merchant's annual revenue.

Questions also remain about the situation in Europe.

Credit rating agency Moody's warned on Monday that the "rapid escalation" of Europe's financial crisis is threatening the creditworthiness of all euro zone governments, even the most highly rated. Only six of the euro zone's 17 countries have the top rating — Germany, France, Austria, the Netherlands, Luxembourg and Finland.

The crisis in Europe will likely be the focus as President Obama hosts European leaders for a summit Monday. ... 51435012/1