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Stocks End Higher Amid European Financial Stability Facility Plan

Strategic Insights

— 1 min read

Stock markets in the US and Europe ended on a high note after a tumultuous week, buoyed by reports of the European Financial Stability Facility's plans to contain the debt crisis. The Dow Jones Industrial Average (DJIA) rose 152 points, or 1.2%, to 12,724, while the S&P 500 gained 17 points, or 1.4%, to 1,343. The global economic landscape remains uncertain, with European leaders meeting to address the sovereign debt crisis.

Key Takeaways:

  • The European Financial Stability Facility will be able to enter primary and secondary markets to support sovereign debt, providing a new tool to combat the debt crisis.
  • French President Nicolas Sarkozy and German Chancellor Angela Merkel agreed on a "common position" for a new bailout plan for Greece, which includes a selective default coupled with a bond buyback and debt swap.
  • Express Scripts Inc. agreed to buy Medco Health Solutions Inc. for $29.1 billion, valuing Medco at $71.36 per share, a 28% premium to Wednesday's close.
  • Intel reported Q2 EPS $0.54 on revenue $13.1 billion, missing estimates of $0.54 EPS on $12.82 billion sales.
  • Morgan Stanley reported Q2 sales of $9.3 billion, beating estimates of $8.04 billion, and lost $0.38 per share, which included a $1.02 negative adjustment.
  • The July Philadelphia Fed index rose to 3.2 from negative 7.7 in June, beating forecasts for negative 2.7.
  • June leading economic indicators rose 0.3%, matching estimates from economists polled by MarketWatch.
  • Housing prices rose 0.4% in May, but new applications for unemployment benefits jumped 10,000 claims last week to a seasonally adjusted 418,000.
  • Continuing claims decreased by 50,000 to 3.7 million, and the average of new claims over the past four weeks dipped 2,750 to 421,250.

Statistics:

  • The DJIA rose 152 points, or 1.2%, to 12,724.
  • The S&P 500 gained 17 points, or 1.4%, to 1,343.
  • The Nikkei was up 0.04%.
  • The Hang Seng was down 0.7%.
  • The FTSE-100 was up 0.85%.
  • New applications for unemployment benefits jumped 10,000 claims last week to a seasonally adjusted 418,000.
  • Continuing claims decreased by 50,000 to 3.7 million.
  • The average of new claims over the past four weeks dipped 2,750 to 421,250.

Sources:

  • MidnightTrader via COMTEX
  • Reuters
  • MarketWatch
  • Comtex SmarTrend Alert
  • Comtex News Network, Inc.

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