U.S. Stocks Jump

U.S. stocks rallied, reversing an early slide, as Hartford Financial Services Group Inc. led a rally in insurers after increasing its profit forecast and saying it’s weathering the credit crisis.

Hartford, which tumbled 92 percent in 2008 before today, doubled and all 21 insurance companies in the Standard & Poor’s 500 Index advanced. Prudential Financial Inc. and MetLife Inc. climbed more than 22 percent as UBS AG said they may benefit from potential regulatory changes. The gains helped the market overcome a morning tumble spurred by government data showing the nation lost the most jobs in 34 years last month as the recession deepened.

The S&P 500 rose 3.7 percent to 876.43 after retreating 3.2 percent earlier. All 10 industry groups advanced as the benchmark index for U.S. stocks pared losses in its fourth weekly retreat since October. The Russell 2000 Index of small U.S. companies climbed 4.8 percent to 460.71. The Dow Jones Industrial Average added 286.81 points, or 3.4 percent, to 8,663.05.

The S&P 500 extended its rebound from an 11-year low on Nov. 20 to 17 percent, gains driven in part by speculation the Federal Reserve will cut interest rates and Congress will pass another economic stimulus. Still, the benchmark index for U.S. equities is down 40 percent in 2008, headed for its worst year since 1931, after the collapse of the subprime mortgage market reduced average profits for five consecutive quarters.

European stocks tumbled for a third day this week after employers in the U.S. cut jobs last month at the fastest pace in 34 years, signaling the world’s largest economy is slipping deeper into recession.

The Dow Jones Stoxx 600 Index lost 3.8 percent to 189.84, with all 19 industry groups decreasing. The measure dropped 8 percent this week, wiping off more than two-thirds of last week’s record advance, as reports signaled the global economy is deteriorating and U.S. unemployment reached the highest level since 1993.

National benchmarks fell in all 18 western European markets except Iceland. The FTSE 100 lost 2.7 percent, as Royal Dutch Shell Plc and Antofagasta Plc retreated. France’s CAC 40 declined 5.5 percent, while Germany’s DAX decreased 4 percent.

Japan stocks fell, extending a weekly loss, as a dimmer earnings outlook for lenders prompted Goldman Sachs Group Inc. to cut price targets on the nation’s biggest banks, overshadowing benefits to manufacturers from oil’s decline. The Nikkei 225 Stock Average swung between gains and losses at least 13 times, and closed down 6.73, or 0.1 percent, to 7,917.51 in Tokyo.

Australian S&P/ASX 200 Index slipped 42.50 points, or 1.2 percent, to 3,489.90 at the close of trading in Sydney, taking its weekly loss to 6.8 percent.

China's stock benchmark rose for a fifth day, its longest winning streak this year, on speculation lower energy costs will spur consumer spending and cut corporate overheads as the government adds measures to bolster the economy. The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, gained 30.25, or 1.5 percent, to 2,013.18 at the close, for a 10 percent weekly gain

India's benchmark stock index fell, led by software exporters, after a newspaper reported Infosys Technologies Ltd. will freeze hiring in the next fiscal year. ndia's benchmark Bombay Stock Exchange Sensitive Index, or Sensex, fell 264.55, or 2.9 percent, to 8,965.20.

TradingEconomics.com, Bloomberg
12/5/2008 1:16:50 PM