Wall Street buoyed by labour market figures

Dow Jones: 11,836.04 (+178.08) Nasdaq: 2,639.98 (+33.02) SP 500: 1,237.90 (+19.62): US STOCKS rebounded from two days of sharp losses yesterday after the Federal Reserve said it is prepared to do more for the economy if conditions warrant, helping to curtail the panicky reaction to Europe's debt crisis.

Market gains were also driven by data showing US private employers added more jobs than expected last month, continuing a recent pattern of better than expected economic data.

Trading volume was light, however, possibly signalling that worries about Greece hold greater sway than the Fed at this time.

Investors sold heavily this week after Greece said it would hold a referendum on an EU bailout crucial to stabilising the euro zone’s financial system.

Federal Reserve chairman Ben Bernanke said the US central bank was monitoring developments in Europe and left open the possibility that the Fed could expand its holdings of mortgage debt if US economic conditions worsened.

“Bernanke was clear that they were prepared to do more, that they have the tools to do more,” said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. “We remain in a very volatile situation.”

Some 7.4 billion shares were traded on the NYSE, the Amex and Nasdaq, which was more than 10 per cent below the 20-day moving average and well below Tuesday’s high volume sell-off when more than 10 billion shares changed hands.

“There’s no volume, which means there’s no conviction in the move; the market remains 100 per cent “macro” driven, and any news out of Europe could still shift markets,” said Eric Lichtenstein, managing director at Knight Capital in Jersey City, New Jersey.

Conditions in Europe remained a wild card as sources told Reuters the EU and IMF will not release an €8 billion payment to Greece until after the country has held its referendum.

Among rising stocks, Citigroup gained 2.3 per cent to $29.83 and JPMorgan added 2.8 per cent to $33.64.

The KBW Bank index climbed 3.3 per cent.

MasterCard shares rose 7 per cent to $357.66 after the credit card processor reported its quarterly profit beat estimates on double-digit increases in volumes. – (Bloomberg)