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Germany and France reported to agree on $2.7 trillion bazooka to aim at euro debt crisis; U.S. stocks soar on the story
10/18/2011 5:33 pm EST
Maybe it’s because European stocks sold down so strongly yesterday and limped through today’s session on renewed fears that European leaders wouldn’t produce a credible plan before the G20 meeting at the beginning of November.
Maybe it’s because after an explosive bounce from the October 3 bottom, investors had started to worry that the market might be running out of gas.
A not terribly detailed report from the United Kingdom’s Guardian newspaper that Germany and France had reached an agreement to boost the size of the European Financial Stability Facility to $2.7 trillion (2 trillion euros) from its current $600 billion led stocks in New York to surge. The agreement will be presented to a EuroZone summit over the coming weekend, the paper reported.
The Standard & Poor’s 500 Stock Index, which was at 1216 at 3 p.m. New York time climbed to 1233 by 3:12 p.m. before closing at 1225 for day. (That is above the 1220 level that has marked the highs for August and September.)
Assuming that the report holds up, and I think that’s extremely likely given the Guardian’s solid sourcing on earlier stories in this debt crisis, I’d expect that the news will boost Asian markets over night and then come back round to produce a surge in European markets that were closed by the time the news broke.
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