Stocks rally for the fourth week in a row ahead of this weekend’s EU leaders’ summit.First, the scoreboard:
Dow: +267.0 pts, +2.3%
S&P 500: +22.8 pts, +1.9%
NASDAQ: +38.8 pts, 1.5%
And now, the top stories:
- Jitters returned to the global markets overnight on rumours that Germany and France had reached an impasse on eurozone debt crisis solution talks. Then a German official came out and said the concerns over disagreements were exaggerated. U.S. futures spiked, setting the markets up for a strong open.
- Meanwhile, European Council President Herman Van Rompuy announced that the second EU summit would indeed take place on the evening of Wednesday, October 26. This is when everyone expects to hear about the “comprehensive and ambitious” solution, which EU leaders have been hyping up. The original summit is still scheduled for Sunday.
- As expected, EU finance ministers approved the next bailout loan tranche to Greece. Meanwhile, the FT reported yet another rumour during late in the trading day. This time, according to a report they obtained, leaders may demand a 60% haircut on Greek sovereign debt held by private investors. However, this didn’t shake today’s bullish market move.
- The U.S. dollar plunged against the yen to a post-World War II low. Some speculated that this was part of a risk-on trade as confidence returned in Europe. Others pointed to rumours of more Fed easing. Regardless, the monster move in the currency pair was probably devastating for anyone on the wrong side of the trade.
- One of the top stocks in the Dow Jones Industrial Average was McDonald’s, which announced better-than-expected earnings of $1.45 per share. Earnings were driven by same-store sales growth in all of its global regions. In other fast-food news, Chipotle announced an earnings surprise. They saw same-store sales grow 11.3%. Shares of McDonald’s and Chipotle jumped 3.7% and 8.3%, respectively.
- In other earnings news, Microsoft reported earnings in line with expectations while beating on revenue. Shares closed up 0.4%. GE, another Dow stock, also announced earnings right in line with expectations, but its shares didn’t fare as well as Microsoft’s. GE closed down 1.9%.
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