Stocks Rally on European Debt Summit Optimism; December Crude Surges Over 2%


Stocks are rallying at mid-day as investor optimism over grows over a weekend summit among European leaders. Global markets are looking for signs of progress toward a comprehensive solution to the debt crisis that has gripped the continent for more than a year. Domestically, earnings are also providing lift.

European markets are firmer and Asian markets closed little changed on the day. There are no economic reports scheduled for release, though earnings news does continue to flow.

Stocks have been choppy all week as European chatter shared the stage with earnings reports. Stocks fell Thursday amid reports the summit meeting could be postponed due to disagreements between Berlin and Paris over how to leverage the euro-zone bailout fund. Equities later recovered after French President Nicolas Sarkozy and German Chancellor Angela Merkel confirmed the summit would go ahead on Sunday and would be followed by a second meeting no later than Wednesday.

In other company news:

Shares of Barnes & Noble ( BKS ) are higher, while, separately, the company said that Joseph Lombardi resigned as chief financial officer. He will remain a non-officer employee until mid-2012 to assist in the transition as the company undertakes an executive search for a new CFO.

Wal-Mart Stores ( WMT ) shares are higher while The New York Times reported the retail giant is cutting health benefits for part-time workers and boosting premiums for much of their full-time staff.

Shares of Allos Therapeutics ( ALTH ) are higher after the company announced that the its merger agreement with AMAG Pharmaceuticals ( AMAG ) was called off. AMAG could not get enough votes to support the acquisition, Bloomberg reported.

American International Group ( AIG ) shares are higher as Bloomberg reports a U.S. judge denied a request to move $10 billion lawsuit against Bank of America (BAC) to state court. AIG had sued BofA over $10 billion in losses on mortgage bond investments.

In earnings news:

--Shares of Schlumberger (SLB) are down after the company reported this morning that Q3 revenue came in at $10.23 bln, up from $6.85 bln in the year ago quarter. Earnings were $0.98, up from $0.70 per share in Q3 last year.

--Chipotle Mexican Grill (CMG) reported Q3 EPS up 25% to $1.90, topping the Thomson Reuters mean analyst estimate for $1.85. Revenue was up 24% at $591 million. The Street expected $584 million. The company guides for low double digit comparable restaurant sales growth for the full year.

--McDonald's (MCD) reports Q3 revenue of $7.16 bln, better than the analyst consensus of $7.02 bln on Thomson Reuters. EPS was $1.45, vs. expectations of $1.43 per share. The company expects October sales to be up 4% to 5%.

--Shares of Microsoft (MSFT) are higher after the software giant reported Q1 earnings of $0.68 per share on revenue of $17.37 bln, vs. the analyst consensus of $0.68 per share in earnings on revenue of $17.23 bln.

Commodities are up. December gold contracts rose 1.69% to $1,641 an ounce while December crude oil contacts are up $2.21 to $87.97 a barrel.

In energy ETFs, the United States Oil Fund (USO) is up 2.16% to $34.06 and the United States Natural Gas fund (UNG) is down 0.34%, to $8.76.

In precious metal ETFs, the SPDR Gold Trust (GLD) is up 1.19% to $156.81. Market Vectors Gold Miners (GDX) is up 1.92% to $54.15. iShares Silver Trust (SLV) is up 2.56% to $30.49.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: AIG , ALTH , AMAG , BKS , WMT

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