No wonder why chaos is a Greek word.First, the scoreboard:
Dow: +208.4 pts, +1.8%
S&P 500: +23.2 pts, +1.9%
NASDAQ: +58.0 pts, +2.2%
And now, the top stories:
- Lots of headlines coming out of Greece today. Ultimately, Prime Minister George Papandreau backtracked on his call for a referendum on the Greek bailout package and eurozone membership. “I will be glad even if we don’t go to a referendum, which was never a purpose in itself,” he said. A later report said the Greek opposition leader called for Papandreau to resign. Doubts are rising that Papandreau will survive a confidence vote, which is scheduled for 4:00 pm EST on Friday.
- Meanwhile, the ECB shocked the markets when it announced a surprise 25 basis point cut in its benchmark rate. This was the first meeting for new president Mario Draghi. In a press conference, Draghi cited deteriorating economic conditions in the eurozone. “The world is heading to a mild recession by year end,” he said. News of the rate cut caused U.S. futures to spike.
- We got a few reads on the U.S. economy this morning. Initial jobless claims fell to 397k from 406k a week ago. Analysts were expecting 400k. Nonfarm productivity climbed 3.1%, which was more than expected. And unit labour costs fell 2.4%, which was more than expected. The moves in productivity and labour costs bode well for corporate profitability. The ISM non-manufacturing index unexpectedly fell to 52.9. However, factory orders surprised by growing 0.3%.
- U.S. retail chains reported growth in October same-store sales, but overall fell short of expectations. Major movers included Abercrombie & Fitch, which dove 19.9%. The retailer actually reported strong U.S. sales, but warned of weakness in Europe, Japan, and Canada.
- Estee Lauder was the biggest winner in the S&P 500 today, soaring 17.9%. The company reported an 18% increase in sales and a 45% jump in profits, crushing expectations. The company seems to be recession-proof.
- Eastman Kodak announced a deeper-than-expected quarterly loss this morning. The company, which seems to be on the brink of bankruptcy, continues to bleed cash. The stock 6.7%.
- Shares of Jefferies crashed this morning on fears of its exposure to troubled European sovereign debt. Egan-Jones downgraded the firm. However, Jefferies quickly released a statement stating that their net exposure to Europe was immaterial. The stock pared most of its losses, closing down just 2.1%.
- Don’t Miss: These Stocks Will Benefit From The Boom In Luxury All Around The World