Stocks closed mixed Wednesday as traders hope that European countries will link their budgets more closely and impose greater fiscal discipline on heavily indebted nations like Greece.
Hopes for a key European summit this week rose and fell on Wednesday, but U.S. stock indexes barely moved. The Dow Jones industrial average closed 46 points higher, while other indicators were mixed.
French and German leaders sought to downplay expectations for the summit, which wraps up Friday. Traders hope that European countries will link their budgets more closely and impose greater fiscal discipline on heavily indebted nations like Greece. Officials said Wednesday that a deal this week might include only some countries, and crafting a fuller plan might take until Christmas.
“The pattern has been, get your hopes up, then be disappointed by EU summits, and that pattern has been in place for a while,” said Steve Van Order, fixed income strategist at Calvert Investment Management.
The Dow rose 46.24 points, or 0.4 percent, to close at 12,196.37. Its biggest gains came from financial companies. JPMorgan Chase & Co. rose 2.3 percent, Bank of America Corp. rose 1.9 percent and insurance giant Travelers Cos. Inc. rose 1.8 percent. Machinery maker Caterpillar Inc. fell 1.1 percent, the most in the Dow 30.
The Standard & Poor’s 500 index fell 2.54 points, or 0.2 percent, at 1,261.01. The Nasdaq composite index lost 0.35, or 0.01 percent, to 2,649.21.
The yield on the 10-year Treasury note fell to 2.04 percent from 2.09 percent late Tuesday.
Traders have been growing restless with the delays in getting a resolution to Europe’s debt crisis. Rating agencies have warned of possible downgrades for nations using the euro if they do not quickly set a firm plan for solving the two-year-old ordeal.
In Europe, yields on Spanish and Italian government debt rose. That means investors are demanding higher returns because of fears that one of those nations might default. Borrowing costs for Spain and Italy had fallen sharply until Tuesday, having reached dangerously high levels a week earlier. European stocks were mostly lower. Germany’s DAX fell 0.6 percent, Britain’s FTSE 0.4 percent.
In corporate news:
– Struggling women’s clothing company Talbots Inc. jumped 70 percent after private-equity firm Sycamore Partners made a $205.2 million takeover offer.
– Men’s Wearhouse Inc. surged 20 percent after reporting third-quarter results that topped Wall Street’s expectations. The company also raised its full-year earnings forecast.
– SAIC Inc. rose 6.6 percent after the defense contractor reported results that beat Wall Street’s expectations.
– First Solar Inc. jumped 4 percent after the company reached a deal to sell a planned California energy farm to MidAmerican Energy Holdings Co.