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Banking Stocks post solid gains; investors wait for ECB, jobs data

Stocks post solid gains; investors wait for ECB, jobs data

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NEW YORK (AP) — U.S. stocks moved solidly higher Tuesday, helped by improving economic data from Japan and Europe as well as hopes that the European Central Bank will expand its stimulus program. However, trading remained quiet ahead of the release later this week of the U.S. government’s monthly jobs survey.

KEEPING SCORE: The Dow Jones industrial average rose 115 points, or 0.6 percent, to 17,825 as of 2:19 p.m. Eastern. The Standard & Poor’s 500 index rose 12 points, or 0.6 percent, to 2,093 and the Nasdaq composite index rose 26 points, or 0.5 percent, to 5,133.

CENTRAL BANK WATCH: Investors are keyed into both the European Central Bank and the Federal Reserve this month. Policy decisions from both central banks will be important in determining the fate of the market in the last month of 2015.

The ECB will decide on Thursday whether to expand its economic stimulus program, which functions similarly to the bond-buying program the Fed used after the financial crisis to keep long-term interest rates low. ECB head Mario Draghi has signaled the bank could expand its bond-buying program or even cut interest rates further.

Investors are so certain that Draghi will expand his program that data out Tuesday showing the unemployment rate in the 19-country eurozone edged down to a four-year low of 10.7 percent in October is not seen as likely to derail those measures.

US JOBS: In the U.S., most of the focus will be on the November job’s report, to be released Friday. Expectations are high for November, with economists looking for the report to show a creation of 271,000 jobs last month. The unemployment rate is expected remain at 5 percent.

This jobs report comes before the Fed’s two-day meeting later this month, where policymakers will debate moving interest rates the opposite direction of the ECB: higher. Securities that allow investors to bet on which way the Fed will move interest rates are forecasting a 79 percent probability the Fed will tighten. Unless Friday’s jobs report is horrific, that is unlikely to change.

“Generally the last couple of weeks have been very quiet. We’ve been and will be in a holding pattern head of the Fed’s December meeting,” said Ryan Larson, head of equity trading with RBC Global Asset Management.

INTEREST RATES: Banks were among the gainers in midday trading, helped by speculation the Fed remains on track to raise interest rates later this month. Higher interest rates are good for banks because they can charge more to loan money.

JPMorgan Chase rose 49 cents, or 0.7 percent, to $67.18. Morgan Stanley rose 66 cents, or 2 percent, to $34.96 and Goldman Sachs rose $1.26, or 0.7 percent, to $191.28.

JAPAN DATA: In other international news, an index measuring factory output in Japan rose to 52.6 in November, the highest reading in 20 months and up from 52.4 in October. The index is based on a 100-point scale, with the 50-point mark separating expansion from contraction. Japanese shares jumped 1.3 percent on the news.

ENERGY: Benchmark U.S. crude rose 19 cents to $41.84 a barrel on the New York Mercantile Exchange. Brent crude oil, which is used to price oil internationally, lost 10 cents to $44.51 a barrel.

BONDS, CURRENCIES: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.15 percent from 2.21 percent. The U.S. dollar slipped to 122.85 yen from 123.25 yen on Monday on the Japanese economic data. The euro rose to $1.0619 from $1.0572.

METALS: Gold fell $1.80, or 0.2 percent, to $1,063.50 an ounce, silver was roughly unchanged at $14.08 an ounce and copper rose two cents, or 1 percent, to $2.072 a pound.

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