STOCKS EXPLODE HIGHER AGAIN: Here's What You Need To Know

explosion

The bond markets were closed and there was no economic data to report on this quiet Columbus Day.  But stocks staged a monster rally.  First, the scoreboard:

Dow: +330, +3.0%
S&P 500: +39, +3.4%
NASDAQ: +87, +3.5%

And now, the top stories:

  • Markets applauded yesterday’s promise by German Chancellor Angela Merkel and French President Nicolas Sarkozy to unveil a solution to the Eurozone debt crisis by the end of the month.
  • France and Belgium structured a $125+ billion bailout of Dexia, which also offered some relief to the financial markets.
  • Fitch downgraded Spain’s long-term guaranteed debt rating today, but this didn’t have nearly the unfavorable impact as their downgrade on Friday.
  • The Euro jumped more than 2% against the dollar today, the largest one-day gain since March 2009.
  • Commodities surged on the increased risk appetite and the decline in the dollar.  Oil futures climbed 3%.  Gold, silver, and copper all jumped.
  • The financial sector led the rally benefiting from renewed confidence in Europe. Citigroup soared 8%.  Morgan Stanley jumped 7%. Bank of America and Wells Fargo each gained 6%.
  • Apple shares closed up 5% on word that the company booked a million iPhone 4 pre-orders on the first day it was available.
  • Meanwhile, smartphone competitor Research In Motion traded lower after its BlackBerry service in Europe, the Middle East, and Africa went down.
  • Sprint got slammed today by multiple downgrades by analysts who were concerned the company would soon run out of money.  S&P even came out and put the company on credit watch.
  • Netflix initially jumped on news that it scrapped its highly criticised plan to split its DVD rental and online streaming services.  However, that rally was short-lived as the stock ended the day deep in the red.
  • Overall, it was a quiet day for news.  Activity should really pick up once Q3 earnings season kicks off with Alcoa tomorrow afternoon.
  • Don’t Miss: 9 Burning Questions We Desperately Want Answered During Earnings Season

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