US stocks rise, European and Japanese data show weakness

It looks like I may have been wrong when I wrote that the recent stock market rally has lost momentum. From Bloomberg:

U.S. stocks rallied, led by the biggest gain in energy shares in six years, after oil jumped by more than $4 a barrel and a private report showed an unexpected increase in jobs.

All 39 energy producers in the Standard & Poor's 500 Index advanced as crude climbed on a decline in gasoline inventories. Wal-Mart Stores Inc. and Walt Disney Co. gained after ADP Employer Services said payrolls grew by 9,000 in July. Bank of America Corp. and Wachovia Corp. led financial shares higher after the Federal Reserve extended an emergency lending program and the Securities and Exchange Commission prolonged a ban on a type of short sale.

The S&P 500 added 21.06 points, or 1.7 percent, to 1,284.26, capping its biggest two-day rally since April. The Dow Jones Industrial Average jumped 186.13, or 1.6 percent, to 11,583.69. The Nasdaq Composite Index increased 10.1 to 2,329.72. Almost two stocks rose for each that dropped on the New York Stock Exchange.

The US dollar is also trading near a one-month high versus the euro and the yen, helped yesterday by some weak economic data coming out from Europe and Japan.

From Bloomberg yesterday:

Europeans' confidence in the outlook for the economy dropped the most since the Sept. 11 terrorist attacks as soaring energy costs and the euro's advance against the dollar rattled consumers and executives.

An index measuring sentiment in the euro area fell 5.3 points to 89.5 this month, the European Commission in Brussels said today. That is more than economists had forecast and the biggest slide since a 6.3-point drop in October 2001, the month after the attacks in the U.S.

This comes as the GfK NOP index of consumer confidence in the UK fell five points to -39 in July, the lowest since the survey began in 1974.

In Japan, industrial production reportedly fell 2 percent in June but the Nomura/JMMA Japan Purchasing Managers Index recovered to 47.0 in July from 46.5 in June.