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June 12, 2012

US stocks open higher despite unease over Europe

From The Associated Press

NEW YORK — Stocks opened slightly higher even as investors appear increasingly uneasy about what comes next in Europe.

The Dow Jones industrial average was up 48 points at 12,459 after the first half-hour of trading Tuesday. Boeing, Bank of America and Alcoa had the biggest gains in the Dow.

Global markets could be repeating the trading pattern from Monday, when relief over a $125 billion lifeline to Spanish banks from the European Union turned into apprehension that the plan doesn’t resolve deeper debt issues in other countries such as Greece or Italy. The Dow gave up an early gain and wound up closing down 142 points.

Spain’s borrowing costs jumped for a second day, edging closer to levels that forced Greece, Ireland and Portugal to ask for emergency financing from their lenders.

The interest rate — or yield — on Spain’s 10-year bond rose 0.19 percentage point to 6.67 percent, inching closer to the 7 percent level past which economists say countries can no longer finance their own debt.

Stocks slipped early in Madrid, then turned positive and were up 0.2 percent after U.S. markets opened. France’s CAC-40 rose 0.2 percent, and Germany’s DAX gained 0.7 percent.

The euro also moved up, rising 0.1 percent to $1.2483.

Investors are still apprehensive ahead of an election in Greece this weekend which may determine whether that country cuts itself free from the euro currency.  

The potential for a broader economic strain in Europe had pushed oil prices to an eight-month of low $81.07 a barrel earlier. The price has recovered to over $83 early Tuesday.

Gasoline prices have also fallen in the U.S., which has buoyed consumer spending, a major economic driver.

There was some good news on the high-end retail front. Michael Kors Holdings rose $3, or 8 percent, to $41.15 percent after reporting its fourth-quarter profit more than tripled on strong demand grew for its luxury clothing and accessories. The company also boosted its earnings forecast for the quarter and the year.

The luxury consumer has recovered from the recession better than other shoppers, but a warning last month from jeweler Tiffany & Co. raised concerns that wealthy U.S. shoppers may be cutting back on purchases. Stocks of other upscale retailers, like Nordstrom, also rose.

In other trading, the Standard & Poor’s 500 index gained 5 points to 1,314, and the Nasdaq composite rose 12 points to 2,821.

Other stocks making big moves:

— VeriFone Systems fell $2.23, or over 6 percent, to $31.71 after the electronic payments company said a jury ruled against it in a patent dispute. VeriFone updated its February-April quarter results to reflect the June 8 verdict, saying late on Monday that it was booking $18 million in expenses.

— A123 Systems jumped 13 percent after the embattled electronic-car battery maker said it had developed new lithium ion technology capable of operating in extreme heat or cold. Heat generated by powerful, next-generation batteries is one of the biggest hurdles in developing cars that do not use fossil fuels.

— Textron rose 69 cents, or 3 percent, to $24.25, one of the biggest gains in the S&P 500, after business jet operator NetJets said it plans to spend up to $9.6 billion on new planes from Textron’s Cessna unit and from Bombardier.

 

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