The Trade: Stocks Eye European Summit
The markets opened sharply higher on optimism that European leaders would reach an agreement on a rescue deal. The Euro was up and the Dollar was taking a beating. No sooner had the markets opened, the Dollar caught a huge bid as fears crept back into the mix. This whipsaw is continuing throughout the day with all eyes on the European summit. Should a deal be reached, the initial reaction will be a sharp rally higher. However, very quickly that may fade as details emerge. The details will shape the future of this market. Right now, the recent rally has factored in a huge rescue package. Will the actual deal meet this view?
Technology is weaker today as Amazon.com, Inc. (NASDAQ:AMZN) missed Wall Street's expectations. Weakness is seen across a majority of technology plays like Microsoft Corporation (NASDAQ:MSFT) and Research In Motion Limited (USA) (NASDAQ:RIMM).
Strength is coming from the financial sector where Goldman Sachs Group, Inc. (NYSE:GS) and Bank of America Corp (NYSE:BAC) are nicely higher. A rescue package in Europe is positive for the U.S. banks based on their exposure to Greece and Italian debt.
With the summit starting around mid day east coast time, it may take 12 hours to hear any sort of result. The markets will move on this result in a major way.