What a ridiculous day.
But first, the scoreboard:
S&P 500: +10.60
And now, the top stories:
- Yesterday was wild, as markets saw gigantic Europe-selling in the morning, followed by a huge comeback. Today was similar, except there were tons more headlines, and the entire seesaw took place before the market even opened.
- Things were briefly positive when the opening bell rang in Europe, as markets raced to catch up with yesterday’s big rally. But things collapsed really quickly, as markets keyed off of a controversial column in the Wall Street Journal, citing an anonymous BNP Paribas executive saying that the bank had run out of dollar-funding options. French bank stocks, which have already been getting slammed on Greece fears/downgrade rumors got crushed for the second day in a row. BNP Paribas fell over 10% at one point. Not long after the article came out, the company came out and said it was still able to access dollar funding, and that put a floor on the market, which rebounded.
- Then in the early going, a rumor came via Reuters that Nicolas Sarkozy and Angela Merkel were going to give a press conference on some matter related to Greece. One report even indicated that they were going to announce some sort of action. Stocks surged on that, moving from violently negative to significantly higher. And then not long after that, the rumor was denied! There would be no Merkel/Sarkozy press conference, just the possibility that Sarkozy might make some comments to the press later in the day — certainly falling short fo any real action.
- But that wasn’t it for European headlines. Later in the day it was reported (and confirmed!) that on Wednesday Merkel, Sarkozy, and Papandreou would hold an emergency call. It’s not clear whether that’s really good or bad, but at least it’s definitely happening. In the early afternoon, there was a report about how Geithner would urge the Germans to expand the EFSF, but then later in the day that was denied. And finally, there was a rumor about how the Dutch Finance Minister had called a Greek default inevitable, but then that was denied, with the Dutch claiming that all they were doing was exploring the various options.
- Oh, and also, there are rumors about a bailout of Europe from the BRICs (possibly in coordination with each other!), but who knows. And remember that rumor from yesterday about China buying Italian bonds. Well it turns out that the only talks have been about China buying Italian industrial assets, not bonds.
- In terms of domestic news, it was mercifully pretty quiet. Shares of Best Buy got slammed to the tune of 6.3% after reporting bad earnings. There continued to be more jousting on the matter of the President’s jobs bill, with Republicans getting a bit more aggressive in their opposition. Also: Late in the day, Harry Reid talked about introducing a new anti-China currency bill in the Senate, and that briefly seemed to rattle equities, though ultimately not for very long.
- In the end: We got a big rally, and are set up for more furious days ahead, with gigantic uncertainty.