Osama death celebration

Photo: AP

Talks of European bank recap and huge tech takeovers spurred another monster rally in the stock markets.First, the scoreboard:

Dow: +131, up 1.2%
S&P 500: +20, up 1.8%
NASDAQ: +56, up 2.3%

And now, the top stories:

  • Investors think Europe is moving in the right direction in fixing its debt crisis.  Yesterday’s global rally, sparked by talks of European Bank recapitalization, was reinforced earlier today when German Chancellor Angela Merkel said her country is “prepared to move to bank recapitalization.”
  • The Financial Times reported that the European Banking Authority was preparing new bank stress tests, which is being seen as a precursor to recapitalization.
  • We also got a preview of Friday’s monster jobs report.  ADP said private companies added 91k new jobs, beating economists’ estimate of 75k.  This overshadowed news that companies announced 115,730 layoffs in September, up 126% from August.
  • The ISM non-manufacturing index came in at 53.0, which was in line with expectations.  A reading above 50 signals expansion in the service sector, so this was welcome news as many have been fearing recession.
  • Commodities prices moved higher. Oil prices climbed 5%.  Metals and metals mining companies also moved higher.
  • Research In Motion shares surged 12% on rumours that it was a target for takeover.  Deal Journal reported that Vodafone could be a potential acquirer.
  • Yahoo! shares also took off on takeover rumours.  A Reuters source said Microsoft was considering the acquisition.  Yahoo! closed up 10%.
  • Morgan Stanley CEO James Gorman told shareholders it would likely beat Goldman Sachs this quarter, reported Charlie Gasparino.  However, the bar seems to be set pretty low as many analysts expect Goldman to report a loss.  Nevertheless, shares gained 4%.
  • Don’t Miss: Banks With Most Exposure To The PIIGS

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