Huge last minute news out of Europe sent stocks soaring out of bear market territory.

First, the scoreboard:

Dow: +153, +1.4%
S&P 500: +25, 2.3%
NASDAQ: +69, 3.0%

And now, the top stories:

  • Worries about Greece and the Eurozone continued to hang over investors’ heads, causing European stock markets to close lower, and US stocks to trade lower for most of the day.
  • Also, all eyes are on how Europe will handle the potential collapse of Belgium bank Dexia, which tumbled 22% today.  More on how Europe will handle banks later.
  • Deutsche Bank announced it would miss its full year profit targets.  Among other things, the bank is taking a 250 million euro impairment charge on its Greek sovereign debt holdings. It’s also planning to to cut 500 jobs.
  • US banks were negative for most of the day.  Morgan Stanley dipped, even after its largest shareholder said it was sticking with the stock.  CEO James Gorman said circulated an email to restore confidence.  But the stock continued to stumble.
  • Bank of America continues to struggle to get its website back up.  No one knows why.
  • August factory orders was the only major economic news of the day, and it disappointed. Orders fell 0.2%.  Economists were hoping for 0%.
  • Most metals sold off. Gold for December delivery fell $41 to $1,616 per ounce.
  • Fed Chairman Ben Bernanke spoke in Washington.  No major news. He told the Joint Economic Committee that the economy is “close to faltering.”  But he also said he’s got a few extra tricks up his sleeve in case the economy needs them.  He also said “we’re innocent bystanders” of the Eurozone debt crisis.
  • As Bernanke spoke, Apple unveiled its iPhone 5, or rather the iPhone 4S.  It’s a world phone with a faster graphics chip, longer battery life, and a better camera that can record 1080p video.  However, the markets were disappointed, sending Apple shares lower.  The stock closed down 0.6%, but it’s still up 15% since the beginning of the year.
  • Stocks were set to close in bear market territory, or down more than 20% from its April 29 high.  But out of nowhere, EVERYTHING RALLIED at the end of the day on news that the EU was looking into recapitalizing the banks.  The Dow staged a huge 370 point rally in the last 45 minutes of trading.  Even Morgan Stanley closed up 12% for the day.
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