U.S. investors seemed to feel more and more confident that the European debt crisis has more bark than bite on Tuesday. This attitude was evidenced by the significant rally of the Dow Jones Industrial Average as it rose up 213.5 points to close at 10,404.39.
European and Asian markets also closed up on Tuesday which was a little surprising after Moody’s dropped the rating on Greece’s outstanding bonds to Ba1, which is makes them junk bonds. This market boost may be the result of announcements that many European countries are freezing wages of some public servants, limiting welfare benefits and cutting jobs and state budgets in order to brace for debt recovery.
The S&P 500 finally exceeded its 200-day average today, closing up 25.6 points at 1,115.23. This movement is taken as a sign of bullish investor and was likely part of the reason for the surge in the Dow. The S&P 500 managed to beat this average in spite of Best BUY Co’s (NYSE: BBY) more than 6% loss as a result of a reported decline in sales and profits.
The Nasdaq was not left out of the rally, gaining 61.92 points to close at 2,305.88.
