Market Recap: Stocks Rally as EU Gets its Act Together
Markets closed up on Wall Street today: Dow +1.55%, S&P +1.69%, Nasdaq +1.94%, Oil +1.30%, Gold +0.09%.
On the commodities front, Oil (NYSE:USO) climbed to $99.62 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbed to $1,714.90 an ounce while Silver (NYSE:SLV) climbed 2.24% to settle at $32.25.
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Today’s markets were up because:
1) EU. Despite opposition from the U.K., twenty-three of the twenty-seven countries in the European Union formally agreed to run only minimal budget deficits in the future and granted the European Court of Justice the right to strike down national laws that don’t enforce such discipline. Though the details of the agreement effected in a summit in Brussels are otherwise scarce, leaders announced that they had agreed to cap the European Stability Mechanism at 500 billion euros, and that EU nations would provide up to 200 billion euros in loans to the International Monetary Fund.
2) U.S. economic data. The U.S. trade deficit narrowed in October for the fourth month in a row, to $43.5 billion from a revised $44.2 billion the month before, despite record imports from China. Separately, an early reading on consumer sentiment in December topped expectations, though with a reading of 67.7, it still came in below the 69.3 average for the last five recessions, and is about 21 percent below the average reading since the University of Michigan began tracking such information with its Consumer Sentiment Index in 1978.
3) Banks. Financials led the day’s rally. JPMorgan (NYSE:JPM) gained 2.98%, Bank of America (NYSE:BAC) added 2.15%, Morgan Stanley (NYSE:MS) climbed 3.15%, Goldman Sachs (NYSE:GS) jumped 1.53%, Citigroup (NYSE:C) climbed 3.68%, and Wells Fargo (NYSE:WFC) tacked on 2.75%.