Markets closed up on Wall Street today: Dow +1.76%, S&P +1.88%, Nasdaq +2.20%, Oil +1.63%, Gold +2.01%.
On the commodities front, Oil (NYSE:USO) climbed slightly to $94.02 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,764.30 an ounce while Silver (NYSE:SLV) climbed 1.64% to settle at $34.50.
Hot Feature: Shale Gas Projects Could Revive U.S. Economy
Today’s markets were up because:
1) ECB. The European Central Bank unexpectedly cut its main refinancing rate by 25 basis points to 1.25% in a surprise move Thursday, acting boldly to support the struggling European economy. The ECB also reduced the interest rate on its deposit facility to 0.5% and the rate on the marginal lending facility to 2.0%. The cut marks a reversal in policy after the ECB increased its rates in July and April, becoming the first major central bank to do so. Markets are already looking for hints that the ECB might further cut rates before the end of the year. With Mario Draghi now in charge, stepping in Tuesday to take over Jean-Claude Trichet’s position as president of the ECB, investors will be waiting to see whether the ECB will make other policy changes, especially whether it will boost its government bond-buying program.
2) Greece. Greek Prime Minister George Papandreou officially called off his plan to hold a referendum today, after which the entire world breathed a collective sigh of relief. Had Greeks rejected the debt deal meant to prevent their government from going into default, the repercussions would have been felt throughout the world, and likely would have toppled other at-risk countries in the euro-zone, namely Italy and Spain. Though Greece’s troubles are far from over, and we have yet to see whether the debt deal hammered out between European leaders last week in Brussels will effectively combat the region’s debt crises, at least the plan isn’t dead in the water, as it could have been come early December, when the referendum was scheduled to take place.
3) Retail. Investors fled retail stocks after many October same-store sales reports came in lower than expected. Of the 17 retailers reporting results, about 80 percent missed estimates, according to Thomson Reuters data. Among retailers reporting disappointing results were Macy’s (NYSE:M), Gap Inc. (NYSE:GPS), Limited Brands (NYSE:LTD), Wet Seal (NASDAQ:WTSLA), Hot Topic (NASDAQ:HOTT), and Abercrombie & Fitch (NYSE:ANF).