Markets Friday will be buffeted by headlines from the European leaders’ summit, but the bar is low for any progress.
“I’ve taken a view that expectations are just so low that anything positive could be constructive for the euro, and lead to a small squeeze,” said Alan Ruskin, G-10 currency strategist at Deutsche Bank. “I see the counterpoint too, where some people are thinking that you sold the rumor, and you can sell the fact too.”
Stocks Thursday traded sharply lower but rallied into the close , with the Dow down just 24 to 12,602, and the S&P 500 off 2 at 1,329. The Nasdaq fell 25 points to 2,849, dragged down by a big decline in technology stocks. The S&P tech sector was the worst performer, down 1 percent. The euro, meanwhile, was down 0.2 percent at 1.2444.
A late day rally came after wire service headlines said German Chancellor Angela Merkel canceled an evening press conference, suggesting to traders that leaders were making progress in talks . Later European Council president Herman Van Rompuy said the leaders agreed to the expected 120 billion euro stimulus package and a 10 billion euro boost to the European Investment Bank’s capital base.
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