Photo: Marines/Vanessa Jimenez
UPDATE (1:18 PM ET): The Dow is up about 120 points or 1 per cent on a quiet day for news.The S&P 500 and the NASDAQ are also rallying.
Some of this positivity is no doubt caused by the events of this morning, which we detailed earlier (below).
Investors have also been chattering about the Greek parliamentary elections this weekend, as the result remains largely up in the air.
ORIGINAL (10: 52 AM ET): Markets are rallying, with all U.S. indices, the Spanish IBEX 35 and the Italian FTSE MIB on the rise.
The Dow is up 80 points or 0.7 per cent.
Across the pond, the IBEX 35 is 0.7 per cent higher and the FTSE MIB is up 0.5 per cent. Core European markets do not appear to be taking part in the rally, however, with the DAX falling 0.4 per cent.
The big rise in Spanish and Italian yields has slackened off since this morning, when yields on Spanish 10-year bonds crossed the scary 7 per cent benchmark.
Further, poor economic data from the U.S. has sparked big hopes for the announcement of QE3 as early as next week, and that could be pushing markets higher.