Market Recap: France and Germany Rescue Markets, Oil and Gold Up Over 2%
Markets closed up on Wall Street today: Dow 2.96%, S&P +3.34%, Nasdaq +3.50%, Oil +2.93%, Gold +2.43%.
On the commodities front, Oil (NYSE:USO) climbed to $85.41 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,675.60 an ounce while Silver (NYSE:SLV) climbed 3.17% to $31.98 an ounce.
Hot Feature: The Rebound in Gold and Silver Continues
Today’s markets were up because:
1) Bank recapitalization. German Chancellor Angela Merkel and French President Nicolas Sarkozy have both pledged to have a plan in place within a month to recapitalize European banks in order to “assure growth and financing,” according to Sarkozy, who spoke from Berlin yesterday. Merkel said European leaders will do “everything necessary” to ensure that banks have enough capital. Sarkozy said Sunday that he and Merkel would deliver a recapitalization plan by the next Group of 20 summit, scheduled for November 3. Investors are viewing the plan as a solid resolution to the euro zone’s banking and sovereign-debt troubles.
2) Economy. A string of positive economic data has economists saying the U.S. has likely dodged a double-dip recession. Following Friday’s Labor Department report that the economy added 103,000 net jobs last month, economists at Goldman Sachs (NYSE:GS) and Macroeconomic Advisers LLC raised their forecasts for third-quarter growth to 2.5%, up from about 2% — that’s nearly double the second quarter’s 1.3% rate of growth. Construction spending jumped in August, manufacturing accelerated in September, and some of the biggest drags on the economy during the first half of the year, namely higher gasoline prices and supply-chain disruptions from the earthquake and tsunami in Japan, are dissipating, all reasons why economists are saying that U.S. economy has skirted another recession.
3) Tech. Netflix (NASDAQ:NFLX) shares led the technology sector higher today after the company announced that it no longer plans to split its DVD-delivery service and streaming business. Apple (NASDAQ:AAPL) shares also climbed on news that the new iPhone 4S had received over one million pre-orders in just one day, far exceeding the previous record of 600,000 set by the iPhone 4. Yahoo (NASDAQ:YHOO) rose after Reuters reported that co-founder and former CEO Jerry Yang is considering a deal to take the company private