Market Recap: Stocks Rally as EU Tries to Get its Act Together

Markets closed up on Wall Street today:

• Dow +1.55 percent
• S&P+1.69 percent
• Nasdaq +1.94 percent
• Oil +1.30 percent
• Gold +0.09 percent

On the commodities front: 

• Oil (NYSE:USO) climbed to $99.62 a barrel
• Gold (NYSE:GLD) climbed to $1,714.90 an ounce
• Silver (NYSE:SLV) climbed 2.24 percent to settle at $32.25

(Related: Bahgdad: We Won’t Cancel Exxon Deal)

Today’s markets were up because:

1) EU: Despite opposition from the U.K., twenty-three of the twenty-seven countries in the European Union formally agreed to run only minimal budget deficits in the future and granted the European Court of Justice the right to strike down national laws that don’t enforce such discipline.

Though the details of the agreement effected in a summit in Brussels are otherwise scarce, leaders announced that they had agreed to cap the European Stability Mechanism at €500 billion [$670 billion], and that EU nations would provide up to €200 billion [$270 billion] in loans to the International Monetary Fund.

2) U.S. Econ Data: The U.S. trade deficit narrowed in October for the fourth month in a row, to $43.5 billion from a revised $44.2 billion the month before, despite record imports from China.

Separately, an early reading on consumer sentiment in December topped expectations, though with a reading of 67.7, it still came in below the 69.3 average for the last five recessions, and is about 21 percent below the average reading since the University of Michigan began tracking such information with its Consumer Sentiment Index in 1978. Translation: it's a boost, but not much.

3) Banks: Financials led the day’s rally. JPMorgan gained 2.98 percent, Bank of America added 2.15 percent, Morgan Stanley climbed 3.15 percent, Goldman Sachs jumped 1.53 percent, Citigroup climbed 3.68 percent, and Wells Fargo tacked on 2.75 percent.

[Editor's note: the above is a cross post that originally appeared on Wall St. Cheat Sheet.]