greek tug o war

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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%.
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