NEW YORK (Reuters) ? Stocks rose at the open on Friday as debt-laden Italy moved to implement tough austerity measures crucial to avoid a euro zone meltdown.
Italian bond yields fell sharply after Italy's Senate approved economic reforms Friday. The package of austerity measures demanded by the European Union now goes to the lower house, which is expected to approve it on Saturday.
Passage will trigger the resignation of Prime Minister Silvio Berlusconi, and former European Commissioner Mario Monti is widely expected to take over as head of a broadly based national unity government. European shares jumped 1.4 percent (.EU)
In Greece, the prime minister designate, Lucas Papademos, a former vice president of the European Central Bank, will name a new crisis cabinet to roll out austerity plans.
"Berlusconi has basically put the condition of his leaving as passing the austerity budget, so if the opposition wants him out, they have to pass the austerity budget," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
"If Monti comes in, that's what the market wants, just as the ex-vice (president) of the ECB is what the market wanted for Greece. So if they can put in these people who have economic expertise or ties to the EU, then they know the people they are working with on the other side and maybe they can figure out how to get through this."
The Dow Jones industrial average (.DJI) gained 206.91 points, or 1.74 percent, to 12,100.70. The Standard & Poor's 500 Index (.SPX)(.INX) rose 19.53 points, or 1.58 percent, to 1,259.22. The Nasdaq Composite Index (.IXIC) added 31.92 points, or 1.22 percent, to 2,657.07.
Financial shares, seen as vulnerable to the debt crisis, were among the best performers. Bank of America Corp (BAC.N) rose 2.7 percent to $6.19, and JPMorgan Chase & Co (JPM.N) gained 2.1 percent to $33.43. The KBW Bank index (.BKX) climbed 1.6 percent.
Walt Disney Co (DIS.N) jumped 6 percent to $36.70 after the media and entertainment group reported a 7 percent gain in revenues and a 30 percent jump in profit, trumping expectations.
On the economic front, Thomson Reuters/University of Michigan Surveys of Consumers preliminary November consumer sentiment index is due to be released at 9:55 a.m. EST (1455 GMT). A Thomson Reuters poll found a forecast for a reading of 61.5 compared with 60.9 in the final October release.
(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)
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