Wall Street advances in response to ECB rate cut

Dow Jones: 12,044.47 (+208.43) Nasdaq: 2,697.97 (+57.99) SP 500: 1,261.15 (+23.25):US STOCKS climbed yesterday, sending the Standard and Poor's 500 Index higher for a second straight day, as Greece moved closer to accepting a bailout and the European Central Bank unexpectedly lowered interest rates.

“They’re pushing the Greeks to the wall,” Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati, said. “It’s a sobering-up moment. On top of that, the ECB’s decision to cut rates will take some of the pressure off of the upcoming financing for the Spanish and Italian markets.”

Stocks tumbled earlier this week as Greek prime minister George Papandreou announced on October 31st a parliamentary confidence vote and his desire to hold a referendum on the rescue pact.

Finance minister Evangelos Venizelos, speaking to party lawmakers in parliament in Athens yesterday, said the nation will not hold a referendum.

“Papandreou absolutely blinked in this game of chicken,” Michael Holland, chairman and founder of New York-based Holland Company, said.

Global stocks also rose as ECB officials unanimously lowered the benchmark interest rate by 25 basis points to 1.25 per cent.

Qualcomm jumped 7.5 per cent to $56.11. The company, which gets most of its profit from licenses on technology used in so- called 3G phones, is benefiting as more consumers switch to the technology.

Kraft added 3.3 per cent to $35.78. Food firms such as Kraft, and General Mills have raised prices on products this year to offset higher costs for ingredients.

Estee Lauder jumped 18 per cent to $118.92. The company said it will raise the annual dividend to $1.05 a share.

DirecTV, a US satellite-television provider climbed 6.2 per cent to $47.63.

Jefferies lost 2.1 per cent to $12.01, paring an earlier decline as it said it has no “meaningful net exposure” to European sovereign debt.

Abercrombie Fitch tumbled 20 per cent, the most in the SP 500, to $59.26. The New Albany, Ohio-based teen-clothing retailer reported a slowing trend for same-store sales in Europe, including flagship stores that had declines. – (Reuters)