Markets closed up on Wall Street today: Dow +1.24%, S&P +1.04%, Nasdaq +0.89%, Oil -0.94%, Gold +1.07%.
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Today’s markets were up because:
1) Europe. European Commission president José Manuel Barroso today urged policymakers to act immediately to resolve the euro zone’s sovereign debt crisis, saying that banks should temporarily raise capital reserves, and that those not satisfying capital requirements should be barred from paying out dividends and bonuses. Meanwhile, Slovakia, the last holdout in the 17-member euro zone, is now expected to pass a measure to increase the powers of the European Financial Stability Facility, increasing the fund’s effective lending capacity to 440 billion euros, giving it the power to inject capital into banks, and allowing it to buy the bonds of distressed governments on the open market.
2) Fed. Minutes from a Federal Reserve policy meeting September 21-22 were released today, showing that policymakers are considering a third round of bond purchases, or QE3, in the near future. Of course, the Fed ultimately decided to shift $400 billion of its investments to longer-term Treasuries, but today’s report shows that the Fed might at least be open to QE3 in the future.
3) Banks. Markets climbed into the green again today for the first time since August 31 as they continued to rally from their October 3 low. Leading them to those gains were financials. All 10 groups in the Standard & Poor’s 500 Index rose, with Wells Fargo (NYSE:WFC) adding 3.45% and Citigroup (NYSE:C) adding 4.96%, following European lenders higher. Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), Barclays (NYSE:BCS), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) were also trading higher today.