Thursday, 27 October 2011

Europe debt summit makes little progress

It looks like a concrete, comprehensive plan to resolve Europe's debt crisis is not quite ready. From Reuters:

Negotiations with Greece's private creditors on a second rescue package for Athens have broken down, throwing efforts to resolve the euro zone debt crisis into doubt despite progress in boosting the region's rescue fund to one trillion euros.

German sources said Chancellor Angela Merkel and French President Nicolas Sarkozy were now negotiating directly with representatives of the banking industry, on the sidelines of a euro zone summit, to try to forge a deal in which the banks will accept a writedown of at least 50 percent on their holdings of Greek government bonds...

The leaders earlier made progress on two other elements -- bank recapitalization and moves to scale up the size of the euro zone's 440 billion euro ($600 bln) bailout fund.

Stocks rose on Wednesday anyway, the S&P 500 rising 1.1 percent. However, commodities fell, led by oil and nickel. The euro ended little changed after declining earlier in the session.

US stocks were boosted by positive data on the economy. Durable goods orders excluding transportation equipment rose 1.7 percent in September. Orders for non-defense capital goods excluding aircraft rose 2.4 percent. Total durable goods orders fell 0.8 percent but this was better than an expected 1.0 percent fall. Another economic report showed that new home sales jumped 5.7 percent in September.

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