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US stocks rise by 1% but Facebook plunges by 10%

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US stocks have risen more than one per cent, helped by hopes that China will launch a stimulus program and signs that Greece’s elections might push through a euro-friendly government.

But Facebook shares headed in the opposite direction again, dropping nearly 10 per cent to $US28.84, far below the $US38 IPO price of May 18.

At the close of trade the Dow was up 125.86 points (1.01 per cent) to 12,580.69.

The S&P 500 index gained 14.60 (1.11 per cent) to 1,332.42, while the Nasdaq added 33.46 (1.18 per cent) to 2,870.99.

“Sentiment was strengthened … amid speculation of further stimulus in the form of increased spending by China, and encouraging comments from political leaders in Greece pertaining to their interest in maintaining their country’s membership in the euro,” said Briefing.com.

Bank of America led the Dow blue chips higher with a 4.1 per cent gain, followed by China-sensitive Caterpillar, up 2.9 per cent, and Alcoa, 3.0 per cent.

Chesapeake Energy jumped 3.4 per cent on the news late Friday that corporate raider Carl Icahn had built a 7.6 per cent stake in the company and signalled he would try to shake up the natural gas giant’s board.

On the Nasdaq, both Apple and Microsoft gained 1.7 per cent, while the newest big tech counter, Facebook, sank again, bringing its loss on the IPO price to 24 per cent.

So far, eight class-action lawsuits have been lodged against the company in district courts in New York and California alleging that smaller investors were denied information that would have darkened their views of the company in the days before the listing.

In after hours trade shares in Blackberry maker Research In Motion sank nearly 11 per cent from its closing price of $11.23 after it warned that it could report a loss in the current quarter.

The company also said it had hired JP Morgan Securities and RBC Capital Markets to study its strategic options.

Bond prices edged higher with the dollar’s gains against the euro. The yield on the 10-year Treasury bond fell to 1.73 per cent from 1.75 per cent late Friday, while the 30-year fell held at 2.84 per cent from 2.85 per cent.

Bond prices and yields move in opposite directions.