Newspaper article THE JOURNAL RECORD

Market Advances on European News

Newspaper article THE JOURNAL RECORD

Market Advances on European News

Article excerpt

NEW YORK (AP) _ Stocks rallied Monday amid hopes that measures taken by European finance ministers to restore calm to the currency markets there will bring lower interest rates to the recession-bound nations.

That could help the U.S. economy, which is improving only slowly, in part because of tough economic times in Europe and Japan, analysts said.

The Dow Jones industrial average rose 21.52 points to 3,560.99.

Advancing issues outnumbered declines by about 3 to 2 on the New York Stock Exchange.

Volume on the floor of the Big Board came to 228.88 million shares as of 4 p.m., down from 250.39 million in the previous session.

The stock market moved steadily higher Monday after the European Community agreed to relax the terms of its Exchange Rate Mechanism hoping to fend off speculative currency attacks.

That gave European nations more room to lower the cost of borrowing, which in the long run could create a larger market for U.S. exports.

"It's great news all around," said Peter Canelo, chief investment strategist at NatWest Securities corp.

The turmoil in the currency markets began after Germany's decision Wednesday not to lower a key interest rate. On Friday, stocks tumbled as speculation rattled the monetary system.

Stocks rose in Europe on the news, providing more fuel for the U.S. rally. In London, the Financial Times-Stock Exchange 100-share index rose 0.5 percent, while stocks jumped 2.1 percent in Paris and 0.7 percent in Germany.

Stocks similarly rose in Mexico, by 1.2 percent, but in Tokyo, the Nikkei Stock Average fell 0.2 percent overnight.

Also propping up U.S. stocks was a slightly better-than-expected report on manufacturing from the National Association of Purchasing Management.

The group's index rose to 49.5 percent in July, up from 48.3 percent in the previous month and higher than the 48 percent economists had expected. …

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