US stocks close higher on Europe's stress tests, cap strong week

Jul 24, 2010, 8:48 GMT

   New York - US stocks posted gains on Friday on the back of positive results from Europe's bank stress tests and a dividend increase by US conglomerate General Electric.

The rally capped a strong week in which all major stock indices surged more than 3 per cent.

Most European stocks gained earlier in the day on the release of a much-anticipated review of the strength of European banks. The 'stress test' results found that seven out of 91 lenders examined did not have enough capital to survive another economic crisis.

The news was welcomed as a step towards greater disclosure of the real condition of Europe's shaky financial sector. All of the continent's major banks withstood the test.

In the United States, General Electric increased shareholders dividends by 20 per cent, the first rise in more than a year. Phone company Verizon and credit card firm American Express also fuelled the gains with better-than-expected quarterly earnings reports.

   The blue-chip Dow Jones Industrial Average gained 102.32 points, or 0.99 per cent, to 10,424.62. The broader Standard and Poor's 500 Index added 8.99 points, or 0.82 per cent, to 1,102.66. The technology-heavy Nasdaq Composite Index climbed 23.58 points, or 1.05 per cent, to 2,269.47.

For the week, the Dow jumped 3.24 per cent, the S&P 500 surged 3.55 per cent and the Nasdaq was up 4.15 per cent.

   The US currency fell to 77.46 euro cents from 77.58 euro cents on Thursday. The dollar gained against the Japanese currency to 87.46 yen from 86.93 yen.