Stocks Soar Amid Enthusiasm Over European Deal; Dow Surges 370

By FOXBusiness

Is the Greek Debt Write-Down Realistic?

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Is the Greek Debt Write-Down Realistic?

Marchel Alexandrovich of Jefferies International on his outlook for the Greek economy.

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The Dow charged more than 370 points higher to surpass the 12000 mark for the first time since August as traders cheered a wide-ranging deal aimed at stemming Europe's sovereign debt crisis.

Today's Markets

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As of 3:20 p.m. ET, the Dow JonesNasdaq

The blue-chip average crossed 12000 for the first time since August, and is within 700 points of reaching its highest close in 2011.  Indeed, the Dow is nearly 1,400 points off of its 2011 lows. Meanwhile, volatility plunged 16%, and yields on government debt rose, indicating traders are rushing back into equity markets. 

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    Financials were the best performers on the day, followed by energy and basic materials shares.  Defensive stocks, like healthcare and consumer staples, however, lagged far behind the broader markets.  

    Wall Street

    Policymakers meeting at a summit in Brussels forged a deal early Thursday morning that analysts say represents a major step forward for the 17-member currency bloc.  Private holders of Greece's government debt agreed to a voluntary writedown of 50%, potentially staving off a default, and a pushing the embattled country's level of debt as compared to economic output down to 120% by 2020 from 160% presently.  There were worries by market participants that a default by Greece would weigh heavily European banks, which had seen their shares decline heavily. 

    The leaders meeting at the summit also agreed to leverage the $610 billion European Financial Stability Facility

    Still, doubts remained Europe's ability to quickly finalize the agreement that was reached Thursday morning. 

    The statement by European officials "was big on words, but short on substance," said Peter Dixon, an economist at Commerzbank Global Equities, noting that European leaders have in the past crafted grandiose plans but failed to follow through. 

    The euro soared 2.2% to $1.4022, European blue chips spiked 6.1%, while global banking shares were up close to 5%.  In comparison, if the Dow were up 6%, it would be a more than 700-point move for the blue-chip index.  The dollar tumbled 1.6% against a basket of six world currencies. 

    Traders will also have a slew of U.S. economic data and corporate earnings to mull over on Thursday. 

    A first reading on third-quarter Gross Domestic Product showed the economy expanded at an annualized pace of 2.5%, dramatically quicker than the 1.3% the quarter prior.  The report came inline with analysts' estimates. 

    First-time claims for unemployment benefits fell slightly to 402,000  last week from 404,000 the week prior.  Economists had been expecting a drop to 400,000.  Claims have been stuck around the 400,000 mark for several weeks, further evidence that the labor market

    Data on the housing market came in well below expectations. Pending home sales plunged 4.6% in September from August, missing forecasts of a gain of 0.1%. However, pending home sales are up 6.4% from the same period last year.  Signed real estate contracts are seen as a forward-looking indicator.  The housing market has been very slowly recovering after being slammed during the recent economic downturn. 

    Earnings season is in full swing this week, with several big name companies reporting. 


    Procter & GambleBristol-Myers Squibb

    Oil and gasoline got a big boost from a substantially weaker dollar, and rallying equity markets.  Light, sweet crude jumped $3.76, or 4.2%, to $93.96 a barrel.  Wholesale RBOB gasoline rose 9 cents, or 3.4%, to $2.74 a gallon. 

    Gold rose $24.20, or 1.4%, to $1,748 a troy ounce. Treasury yields pointed higher as investors moved back into equity markets.  The benchmark 10-year note yields 2.291% from 2.210%. 

    Foreign Markets

    European blue chips soared 6.1%, the English FTSE 100DAX

    In Asia, the Japanese Nikkei 225Hang Seng

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