Good ‘stress test’ results produce rise in stocks
0 Comments | Charleston Gazette, The, Jul 24, 2010 | by Stephen Bernard
NEW YORK – Investors bought stocks again on the latest reassuring news about the economy. This time, it was about European banks.
European regulators, who issued the results of what are called “stress tests” on the banks, said only a handful would struggle if the continent’s economy weakens. That helped send the Dow Jones industrial average rose more than 100 points.
The latest second-quarter earnings reports also convinced investors that the economic recovery is proceeding. And so did announcements that General Electric Co. is raising its dividend and reports that French drug maker Sanofi-Aventis is interested in buying Genzyme Corp.
Investors were initially cautious about the stress tests, which measure how well banks will fare if government debt problems and the region’s economy worsened. Europe’s debt issues have sent stocks falling worldwide since April.
There were some concerns in the market that the tests might not have been rigorous enough. And because the results were issued after the close of trading in Europe, it won’t be known until Monday how investors on the continent react and, if they react poorly, if that will prompt U.S
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