U.S. Stocks Gain as ECB Offers Loans to Banks in Effort to Tame Crisis

By Rita Nazareth - Sep 15, 2011 8:31 PM GMT+0700

U.S. stocks rose, signaling the Standard & Poor’s 500 Index may gain for a fourth straight day, as a package of dollar loans for European banks assuaged concern spurred by signs unemployment is worsening.

The S&P 500 rose 0.9 percent to 1,199.25 at 9:31 a.m. in New York. The benchmark gauge has gained 3 percent over the last three days.

Stock futures rallied after the ECB said it will lend euro- area banks dollars in three separate three-month loans to ensure they have enough of the U.S. currency through the end of the year. The S&P 500 climbed 1.4 percent yesterday as French President Nicolas Sarkozy and German Chancellor Angela Merkel said they are “convinced” Greece will remain in the euro area.

Equities extended gains today after a report showed industrial production in the U.S. unexpectedly rose in August.

Stock futures trimmed gains earlier as data showed jobless claims climbed by 11,000 to 428,000 in the week ended Sept. 10 that included the Labor Day holiday. Economists surveyed by Bloomberg News projected a drop in claims to 411,000, according to the median forecast.

The Federal Reserve Bank of New York’s general economic index dropped to minus 8.8, the weakest reading since November, from minus 7.7 in August. Economists projected an increase to minus 4, based on the median of 54 forecasts in a Bloomberg News survey. Readings less than zero signal companies in the so- called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut, are cutting back.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net