Market Recap: Libya Resumes Oil Production, Banks Jump, European Hopes Feed Market

Markets closed up on Wall Street today: Dow +2.53%, S&P +2.33%, Nasdaq +1.35%, Oil +1.67%, Gold -0.57%.

On the commodities front, Oil (NYSE:USO) climbed to $81.18 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) falling to $1,630.40 an ounce while Silver (NYSE:SLV) climbed 2.09% to $30.73 an ounce.

Hot Feature: Is the European Debt Crisis Bullish for Gold?

Today’s markets were up because:

1) Europe. Plans for an ambitious new euro-zone rescue package are coming together, according to the International Monetary Fund, and are expected to increase the size of the euro-zone bailout fund, the European Financial Stability Facility, from 440 billion euros to 2 trillion euros. European governments hope to have the new plan in place within five to six weeks. The IMF assured investors that Europe’s leaders were doing everything they could to combat Greece’s sovereign debt crisis and stop it from spreading, giving the markets a bit of relief. Investors were also heartened to hear that the European Central Bank might choose to cut interest rates at its next policy meeting on October 8. Of course, until any new measures are actually implemented, investors remain cautious, though slightly more optimistic.

2) Libya. Libya has resumed oil production, tapping 15 wells and producing some 31,900 barrels a day, according to Italian oil giant Eni S.p.A. (NYSE:E). Eni reported Monday that production had resumed at the Abu-Attifel fields, roughly 300 kilometers south of the city of Benghazi. Others wells are expected to be reactivated soon. The news had major oil stocks trading up today, including BP (NYSE:BP), Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM), ConocoPhillips (NYSE:COP), Marathon (NYSE:MRO), and of course, Eni. Many oil stocks were outperforming the markets.

3) Banks. The financial sector was today’s best-performing sector, with Barclays (NYSE:BCS) leading the way with an over 8% climb, followed by Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and Royal Bank of Scotland (NYSE:RBS), all of which outperformed the Dow, S&P 500, and the Nasdaq.

BONUS: New Home Sales Continued to Decline in August

More from The Cheat Sheet