Citigroup (NYSE:C), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), JP Morgan (NYSE:JPM) and Morgan Stanley (NYSE:MS), along with numerous other company stocks, have surged upward on the news the European Union will be offering a loan package to combat the crisis worth somewhere near $1 trillion.
Most commodity companies also had major gains as the news seems to have created some optimism that demand will continue as the loans are released into the various economies.
Indexes also rose strongly, with Standard & Poor’s 500 Index rising by over 4 percent a little after mid-day EST, and Dow Jones Industrial Average climbing by just under 4 percent as well.
According to Birinyi, this is the fourth-largest futures rally since 1993, with the advance of the DOW performing close to historical levels in times like these, of 4.6 percent on average after a 10 percent increase in futures.
Gold predictably fell on the news, dropping below $1,200 an ounce to $1,199 as of 1:30 EST.
Alcoa Inc. (NYSE:AA), Freeport-McMoRan Copper & Gold (NYSE:FCX) and Chevron (NYSE:CVX) are all up big today in response to the sovereign debt bailout news.
Head U.S. equity strategist at JPMorgan Chase & Co., Thomas Lee said about the loan bailout, “It’s unequivocally positive for the markets. There was never really a question of financial resource but of political will. Sovereign solvency and investors increasingly thinking there was a risk of a dissolution of the EU were becoming very real concerns for equities.”
Now it remains to be seen how the markets respond once it is realized what other consequences may arise from the amount of money possibly thrown into the markets and irresponsible countries.