A bunch of negative news around the world couldn’t stop a mysterious stock market rally. And then news broke of a European bazooka.
First, the scoreboard:
Dow: +180 pts, +1.6%
S&P 500: +25 pts, 2.0%
NASDAQ: +43 pts, 1.6%
And now, the top stories:
- Today really started last night when Moody’s reiterated France Aaa rating, but warned the its outlook was potentially at risk due to debt. French CDS exploded higher.
- China’s real GDP figure came in at 9.1%, but fell shy of expectations of 9.3%. The China bears started screaming hardlanding again
- Inflation figures were hotter than expected on both sides of the pond this morning. U.K.’s CPI jumped 5.2% versus the expectation of 4.9%. Higher food and energy prices caused U.S. PPI to increase 0.8% versus the 0.2% expectation.
- U.S. bank earnings weren’t anything to cheer about. Bank of America reported less-than-stellar earnings, which were riddled with one-time items. Goldman Sachs’ missed earnings expectations by a huge margin. However, the two banks jumped 10% and 6%, respectively. Morgan Stanley announces Q3 results tomorrow.
- One green shoot this morning came out of the NAHB, who said homebuilder sentiment climbed to 18. Homebuilder stocks like Toll Brothers, PulteGroup, D.R. Horton, and Lennar soared 9% to 13%.
- The overall tone of the earnings and economic data was not that great. However, the markets climbed higher throughout the day.
- And then there was the HUGE story of the day: The Guardian reported that France and Germany were in agreement on plan to boost the EFSF by €2 trillion. This was the ‘bazooka’ many were hoping for. This is a contrast from the wet blanket Wolfgang Schaeuble threw on the markets yesterday. We may hear more about this on Sunday’s EU leaders summit.
- One notable large cap loser was IBM, whose shares fell after the company announced disappointing revenue last night.
- After the bell, Apple announces earnings and expectations are high on the tail of the company’s record weekend for iPhone 4S sales. Yahoo! and Intel will also announce earnings after the markets close today. US economic bellwether CSX Corp. also announces.
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