Market Recap: Financials Lead Stocks Higher as Europe Fears Ease

January 10, 2012

Markets closed up on Wall Street today: Dow +0.56%, S&P +0.89%, Nasdaq +0.97%, Oil +0.86%, Gold +1.46%.

On the commodities front, Oil (NYSE:USO) climbed to $102.18 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,631.60 an ounce while Silver (NYSE:SLV) rose 3.75% to settle at $29.86.

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Today’s markets were up because:

1) Europe. Fitch Ratings said today that Europe is on the right path toward solving its debt problems, while reiterating the agency’s December stance that it does not plan to downgraded AAA-rated France this year. The ratings agency will give a decision on all European countries it currently has on negative watch by the end of the month, but though the company indicated there’s a “significant chance” that Italy will be downgraded, Italian Prime Minister Mario Monti was in the news today saying he would unveil a package of measures meant to encourage competition and expansion and stimulate economic growth at a meeting of European Union finance ministers later this month.

2) Earnings. An upbeat report from Alcoa (NYSE:AA) kicked off earnings season after the bell on Monday, with investors brushing off the company’s fourth-quarter loss, instead focusing on the fact that the nation’s largest aluminum producer topped sales estimates and issued a positive outlook for aluminum demand in 2012. Though no major corporate reports are scheduled for today, Lennar (NYSE:LEN) and JPMorgan (NYSE:JPM) are on deck for this week.

3) Banks. Financial stocks led today’s rally, with Bank of America (NYSE:BAC) surging 6 percent, making it the best performer on the Dow. Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) were both up around 4 percent, while Citigroup (NYSE:C) and JPMorgan (NYSE:JPM) each rose more than 2 percent.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com