U.S. Financial Markets Rally on European Bailout and Tech Stocks

Major Wall Street Indexes including Dow Jones Industrials (NYSE:DIA) and S&P 500 (NYSE:SPY) rallied hard in the last hour of trading on rumors of a Franco/German agreement to settle the Greece Crisis.

British newspaper Guardian reported that a deal was at hand between France and Germany to expand the bailout funds for the peripheral nations and markets rallied hard in response.

However, conflicting reports indicate that the story may have been just another rumor out of Europe.

If a settlement is at hand it won’t be a moment too soon as Spain was downgraded two levels by Moody’s due to its high debt load and funding risks.

At home, earnings were mixed in the financials (NYSE:XLF) as Goldman Sachs (NYSE:GS) lost $428 million for the quarter, only its second quarterly loss in 12 years.

Coca Cola (NYSE:KO), Yahoo (NASDAQ:YHOO) and Intel (NASDAQ:INTC) all posted favorable earnings reports while tech (QQQ) darlings Apple (NASDAQ:AAPL) missed expectations and was hammered down 7% in the after hours session, along with IBM (NYSE:IBM)

The homebuilder index (NYSE:ITB) came in more positive than last month and inflation picked up with the Producer Price Index ticking up +0.8% versus a previous reading of zero.

Tomorrow comes more inflation news with the CPI and news about Housing Starts, Single Family Building Permits and the Fed Beige Book.

Stock Market Roundup:

Dow Jones Industrials (NYSE:DIA) +180; +1.6%

S&P 500 (NYSE:SPY)+24.5; +2.1%

NASDAQ (NASDAQ:QQQ) +42.5; +1.6%

Russell 2000 (NYSE:IWM) +20.7; +3.1%

Bottom Line: It all comes down to Europe and this is truly one of the most important times in modern financial and economic history.

Disclosure: No positions in ETFs or stocks discussed in this article.

John Nyaradi is the author of The ETF Investing Premium Newsletter.