STOCKS RALLY AND ITALY DIDN'T COLLAPSE: Here's What You Need To Know

leaning tower of pisaTower of Pisa

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Europe is in bad shape, but it could be a lot worse.First, the scoreboard:

Dow: +112.9 pts, +1.0%
S&P 500: +10.6 pts, +0.9%
NASDAQ: +3.5 pts, +0.1%

And now, the top stories:

  • All eyes were on this morning’s Italian 1-year bill auction.  Everyone was freaking out after Italy’s bond yields hit record highs yesterday.  But this morning’s auction effectively went on without a hitch. The 10-year yield fell back below 7%. Sure, borrowing costs are still crisis levels.  But, things could’ve been a lot worse.  And based on today’s global rally, markets agree they could’ve been worse.
  • There was a brief scare in France this morning.  Due to a technical glitch at S&P, everyone thought the credit ratings agency was on the verge of downgrading France.  However, S&P quickly quelled those rumours by affirming the country’s AAA rating.  Market’s rallied sharply on the news. But this doesn’t mean France is without its problems.  Here’s The Story Of Why People Are Starting To Flip Out Over France >
  • It’s also wo rh noting that Lorenzo Bini Smaghi will be vacating his seat on the European Central Bank’s (ECB) executive board.  Some, including French President Nicholas Sarkozy, were concerned that having too many Italians at the ECB (the new president Mario Draghi is Italian) would lead to biased monetary policy.
  • In other news, Greece appointed Lucas Papademos to Prime Minister, filling the post vacated by George Papandreou.  Now all they have to do is fix the debt crisis.
  • In the U.S., initial jobless claims fell to 390k, beating the expectation for 400k.  Sure, the number is still high, but the direction of the weekly number is encouraging. The September trade deficit was narrower than expected.  Also, import prices declined by more than expected.
  • Cisco was big winner today on strong earnings. Adjusted EPS of $0.43 on revenue of $11.26 billion beat analysts estimates of $0.39 and $11.02 billion, respectively.
  • However, Apple shares fell.  An analysts warned of lower iPad shipments.
  • Green Mountain Coffee Roasters got absolutely demolished after fiscal Q4 revenue came in short of expectations. Here’s David Einhorn’s Presentation That Absolutely Destroys Green Mountain Coffee >
  • Don’t Miss: A Complete Look At China’s Gargantuan Population

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