STOCKS SURGE AFTER EUROPE HARDLY SOLVES ANYTHING: Here's What You Need To Know

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Tons of earnings announcements and some economic data.  But today was really all about Europe.

First, the scoreboard:

Dow: +162.4 pts, +1.4%
S&P 500: +13.0 pts, +1.1%
NASDAQ: +12.3 pts, +0.5%

And now, the top stories:

  • A little after 9:00 am EDT, German lawmakers voted in support of a plan to leverage the European Financial Stability Facility (EFSF).  Although this was widely expected, U.S. futures rallied on the news, setting up stock markets for a higher open.
  • However, stock quickly dived in the first few minutes of trading when it was reported that talks on the losses private Greek bondholders will take are deadlocked.
  • Earlier this morning, Bloomberg reported that the EFSF head was heading to China.  This breathed new life into the possibility that BRIC countries could play a role in leveraging the eurozone bailout fund.  However, people didn’t get excited about this until around 1:30, when more media outlets started publishing the story.  The stock markets spiked on the rumour.
  • Overall, not much came out of the EU leaders’ summit today.
  • Some positive U.S. economic data flew under the radars today. The headline durable goods orders number was -0.8%, which was slightly better than the -1.0% expectation. Ex-transports, orders jumped 1.7%, crushing the expectation for 0.4%.
  • New home sales grew 5.7% month-to-month to an annualized rate of 317K.  Analysts were expecting 300k.  In fact, some of the biggest winners in today’s market rally were the homebuilder stocks.
  • Amazon.com was one of the biggest losers today, falling 12%.  Last night, the online retailer posted earnings of 14 cents per share, missing estimates by a dime. The company also projected a Q4 operating loss.  The company seems to be losing money on its new Kindle Fire.
  • Ford reported Q3 revenue of $33.1 billion and adjusted earnings of 46 cents per share.  Both figures beat expectations.  But shares fell. 
  • Boeing, on the other hand, soared after it announced a huge earnings surprise.  Q3 EPS jumped 30% to $1.46, crushing the estimate of $1.10.  Management cut guidance for commercial aeroplane deliveries, but it raised full-year EPS guidance to $4.30 to $4.40.  Analysts were expecting $4.27.
  • Other major movers today included First Solar, who decided to announce earnings early after yesterday’s monster sell-off.  Their Q3 numbers missed, but shares rallied.
  • Meanwhile, the EU summit continues and you can follow live updates at Money Game>
  • Don’t Miss: DECODING THE EURO-MESS: All The Acronyms And Abbreviations You Need To Know

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