http://www.latimes.com/business/la-fi-markets-20100510,0,5725819,print.story
latimes.com
Stocks soar as Europeans agree to $1-trillion aid package
The Dow Jones industrials surge more than 400 points, or 3.9%, trailing the S&P 500 and the Nasdaq. Markets in Europe rise even more sharply.
By Nathaniel Popper, Los Angeles Times
1:41 PM PDT, May 10, 2010
Reporting from New York
Stock markets soared around the world Monday after European leaders agreed on a nearly $1-trillion aid package to keep worries about the debt burdens of Greece, Portugal and other countries from turning into another global financial crisis.
The Dow Jones industrial average gained about 405 points, or 3.9%, to about 10,786. The Standard & Poor's 500 index surged 4.4%, while the Nasdaq composite index rocketed up 4.8%..
European markets rose even more sharply, with key indexes up 14% in Spain, 11% in Italy, 9.1% in Greece and 5.3% in Germany.
"This is huge," said Steven Ricchiuto, chief economist at Mizuho Securities in New York. "It's a big program, it's substantive, it's unexpected."
The bailout package, announced early Monday in Europe after all-night negotiations, was larger than expected and followed weeks of indecisive policy moves from European leaders. It includes guarantees for loans issued by European countries as well as a promise by the European Central Bank agreed to purchase large amounts of government bonds.
"Instead of putting them grossly behind the curve as they were last week, it actually puts them a bit ahead of the curve," said Sam Stovall, chief investment strategist at Standard & Poor's Corp.
In the currency market, the euro, which had steadily lost ground against the dollar, rebounded on the news, but fell back from its high point of the day amid skepticism about the bailout plan's ability to buttress the European economy or its single currency. The 16-nation currency was trading Monday afternoon at $1.28, barely a penny higher than its market value late Friday.