Market Recap: S&P Rumor Disrupts Market Rally
Markets closed up on Wall Street today: Dow +0.65%, S&P +1.03%, Nasdaq +1.10%, Oil -0.01%, Gold -1.52%.
On the commodities front, Oil (NYSE:USO) fell to $100.95 a barrel. Precious metals were also down, with Gold (NYSE:GLD) falling to $1,724.70 an ounce while Silver (NYSE:SLV) fell 2.08% to settle at $32.01.
Today’s markets were up because:
1) France and Germany. Leaders of the euro zone’s two largest economies hammered out a joint proposal today for a more economically unified Europe days ahead of a crucial summit. German Chancellor Angela Merkel and French President Nicolas Sarkozy will propose a new treaty that demands closer economic integration and tougher policing of fiscal rules when they meet with other European Union leaders at a summit in Brussels on Friday. Speaking after the meeting, Sarkozy said the “Franco-German agreement is very complete” and will be “written up in a letter and presented to [European Council President] Herman Van Rompuy on Wednesday.”
2) Standard & Poor’s. The indexes were all up around 1.5% earlier in the day on news that Merkel and Sarkozy had come to a quick and decisive agreement on creating a tighter fiscal union, but pulled back in the mid-afternoon after a Financial Times report suggested that Standard & Poor’s will put Germany, France, the Netherlands, Austria, Finland and Luxembourg — all of the euro zone’s AAA-rated members — on “creditwatch negative” later Monday. That would mean the countries have a 50% chance of being downgraded within the next 90 days.
3) Banks. Bank stocks were leading the broad advance this morning, and remained the market’s best performers through close. JPMorgan (NYSE:JPM) and Bank of America (NYSE:BAC) posted the Dow’s biggest gains, while shares of Citigroup (NYSE:C), Morgan Stanley (NYSE:MS), and Goldman Sachs (NYSE:GS) all tacked on from 2 to 7 percent by closing bell.