Europe's hell week begins with new EU treaty proposals and reports of an S&P ratings action bombshell.
First, the scoreboard:
Dow: +78.4 pts, +0.7%
S&P 500: +12.8 pts, +1.0%
NASDAQ: +28.8 pts, +1.1%
And now, the top stories:
- Over the weekend, Italy's new prime minister Mario Monti unveiled a 30 billion euro austerity package, which included spending cuts and tax hikes. Discussion of pension reforms reduced one Italian politician to tears. This morning, however, Italy saw its 10-year yield dip below 6%.
- German Chancellor Angela Merkel and French President Nicholas Sarkozy met today and announced their plans for a new European Union treaty. Under the new rules, the EU could place restrictions on the size of government deficits and spending programs. A final treaty outline is expected by March 2012.
- Optimism in Europe sparked a rally in the U.S. stock markets, which as usual was led by the financials sector. Morgan Stanley jumped 6.8%. Citigroup increased 5.9%.
- U.S. economic data was largely overlooked during this morning's rally. The ISM services number unexpectedly fell to 52.0, missing the expectation of an increase to 53.9. This also compares to last month's number of 52.9. October factory orders fell 0.4%, which was slightly worse than the 0.3% decline expected. September factory orders were revised sharply lower.
- Today proved to be a good one for newspapers. The National Association of Newspapers said newspaper advertising was in better shaped than analysts expected. This triggered positive comments for the industry by Citigroup, UBS, and Lazard analysts. Gannett was the big winner with shares jumping 10.2%. E.W. Scripps gained 2.7%. The New York Times Company climbed 2.2%.
- Speaking of newspapers, the Financial Times reported this afternoon that Standard & Poor's would place six eurozone sovereigns on credit watch negative today. Markets began to sell off. Minutes later, Bloomberg reported that EU officials were notified that S&P would actually place all 17 eurozone nations on credit watch negative. Markets sold off even more. According to reports, the S&P actions will be announced after the bell. Follow the updates LIVE at Money Game >
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