Stocks closed near session highs in thin, volatile trading Tuesday, boosted by news Italian Prime Minister Silvio Berlusconi will resign after the parliament passes economic reforms demanded by the EU.
“The market likes the announcement…But I’m not sure if this is going to change things at the end of the day,” said Doreen Mogavero, president and CEO of Mogavero Lee & Company. “[Berlusconi’s] resignation gives us a better chance at getting resolutions quicker, but it does not negate the fact that there are still difficulties in Italy.”
The Dow Jones Industrial Average rallied 101.79 points, or 0.84 percent, to close at 12,170.18, led by Wal-Mart and JPMorgan .
The S&P 500 advanced 14.80 points, or 1.17 percent, to end at 1,275.92. The Nasdaq added 32.24 points, or 1.20 percent, to finish at 2,727.49.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished below 28.
All 10 S&P sectors finished higher, led by banks and energy.
Berlusconi agreed to step down from his postafter parliament passes country's economic reforms demanded by the EU.
Stocks were volatile for most of the session after Berlusconi eked out a victory in Parliament on budget policy, but failed to obtain an absolute majorityin the Chamber of Deputies, fueling pressure on him to resign.
“The market has been anxious for Berlusconi to resign…now the question will be his replacement and the new government formation, but this was something that was quite apparent that the market wanted,” said Quincy Krosby, market strategist, Prudential Financial. “It’s interesting to see that market was poised for this all day—we had a flat trading session waiting for news and that the pressure was on him.”
