Market Recap: Financials Lead Stocks Higher as Europe Fears Ease

Markets closed up on Wall Street today:

• Dow +0.56 percent
• S&P +0.89 percent
• Nasdaq +0.97 percent
• Oil +0.86 percent
• Gold +1.46 percent

On the commodities front:

• Oil (NYSE:USO) climbed to $102.18 a barrel
• Gold (NYSE:GLD) climbing to $1,631.60 an ounce
• Silver (NYSE:SLV) rose 3.75 percent to settle at $29.86

(Related: DOJ Widens Scope of Settlement to Resolve Mortgage Abuses)

Today’s markets were up because:

1) Europe: Fitch Ratings said today that Europe is on the “right path” toward solving its debt problems, while reiterating the agency’s December stance that it does not plan to downgraded AAA-rated France this year.

The ratings agency will give a decision on all European countries it currently has on negative watch by the end of the month. Though the company indicated there’s a “significant chance” that Italy will be downgraded, Italian Prime Minister Mario Monti was in the news today saying he would unveil a package of measures meant to encourage competition and expansion and stimulate economic growth at a meeting of European Union finance ministers later this month.

2) Earnings: An upbeat report from Alcoa kicked off earnings season after the bell on Monday, with investors brushing off the company’s fourth-quarter loss, instead focusing on the fact that the nation’s largest aluminum producer topped sales estimates and issued a positive outlook for aluminum demand in 2012. Though no major corporate reports are scheduled for today, Lennar  and JPMorgan are on deck for this week.

3) Banks: Financial stocks led today’s rally, with Bank of America surging 6 percent, making it the best performer on the Dow. Morgan Stanley and Goldman Sachs were both up around 4 percent, while Citigroup and JPMorgan each rose more than 2 percent.

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