Leaders from France and Germany said that they are working on a plan to comprehensively address the troubles facing the region, which they will present in early November. After months of inaction, potential signs of progress helped boost global stocks.
Asian markets closed mostly higher, as the Kospi rose .4%, and the ASX 200 gained .9%. The Hang Seng overcame early losses to close up fractionally. China’s Shanghai Composite reopened after a lengthy holiday, closing down .6%. Japanese markets were closed.
Leaders from France and Germany said that they are working on a plan to comprehensively address the troubles facing the region, which they will present in early November. After months of inaction, potential signs of progress helped boost global stocks.
European markets rallied for their 4th straight day, led by the DAX which climbed 3%. The CAC40 gained 2.1% and the FTSE rose 1.8% in a broad rally.
US stocks posted impressive gains, particularly in the last hour of the day. The Dow jumped 330 points to 11433, the Nasdaq rallied 3.5%, and the S&P 50 0advanced 3.4%. Over the past 5 days, the Dow has climbed 1028 points from its low of 10404.
Financial stocks rallied, with many issues gaining more than 6%.
Apple announced that it has received more than 1 million orders for the new iPhone 4S. Apple shares gained 5.1% to 388.81.
Currencies
The Dollar tumbled against major world currencies as investors rushed to unwind short positions. The Swiss Franc was the biggest gainer, surging 2.5% to 1.1057. The Australian Dollar rose 2% to .9980, the Euro rallied 1.9% to 1.3638, and the Canadian Dollar climbed 1.2% to 1.0272. The Lagging behind, the Pound rose .6% to 1.5660 and the Yen closed flat.
Economic Outlook
While investors cheered progress on the European front, no plan was announced, and no problems have yet been solved, suggesting this was primarily a short covering rally, rather than a true market turn.
Tuesday’s reports will include the minutes from the last FOMC meeting, and the NFIB small business optimism index. Earnings are due from Alcoa, kicking off earnings season.