Market Recap: Stocks Move Higher on Global Economic Data

Markets closed up on Wall Street today: Dow +0.48%, S&P +0.36%, Nasdaq +0.64%, Oil +2.10%, Gold +1.26%.

On the commodities front, Oil (NYSE:USO) climbed to $100.77 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,651.30 an ounce while Silver (NYSE:SLV) rose 1.65% to settle at $30.69.

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Today’s markets were up because:

1) Data. A government report today showed China’s economy to have grown at an annual rate of 8.9% in the last three months of 2011, faster than economists had expected. Investors were also encouraged when a German sentiment index came in better than expected, and a New York regional manufacturing index topped expectations thanks to strength in new orders and employment. The three pieces of news, which positive signs for three of the biggest economies in the world, supported global stock markets today, helping investors shrug off Standard & Poor’s downgrade of nine euro-zone governments and Europe’s bailout fund.

2) Greece. A Fitch Ratings official told Reuters today that, “Greece is insolvent so it will default.” Greek officials and private investors are set to resume debt talks on Wednesday after negotiations broke down last week over the interest rate on new bonds Greece will offer and a plan to enforce investor losses. Without the so-called “PSI” deal, which would see Greece’s creditors voluntarily giving up a lot of of their promised returns, the EU and IMF have warned that they will not consider Athens’ debt to be back on a sustainable track and will not release further aid. Greece’s private creditors have warned that a deal must be reached soon if the government is to avoid a disorderly default when a major bond redemption comes due in late March.

3) Banks. Despite a broad rally, bank stocks are down today on lackluster earnings reports from JPMorgan (NYSE:JPM) and Citigroup (NYSE:C). Bank of America (NYSE:BAC) was down around 2 percent today, as was Morgan Stanley (NYSE:MS), which recently announced it will cap immediate cash bonuses at $125,000 this year as the firm curtails pay and defers more compensation for senior executives. Wells Fargo (NYSE:WFC) was the sole gainer of the major banks after reporting that its income rose 20 percent in the fourth quarter as its mortgage business steadied and deposits grew.

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