Central banks of the world (including the Fed Reserve and the ECB) have recently agreed to reduce the cost of dollar loans for those European banks that encounter problems in order to prevent the eurozone debts form initiating the collapse of the global banking system.
The news reassured the stock market. Dow Jones gained 4,24%, thus reaching 12.045,68 – the best daily result since March 2009. S&P 500 passed 4,33% up to 1.246,96. Nasdaq Composite increased by 4,17% up to 2.620,34.
S&P’s financial sector index gained 6.6% while Bank of America’s stock appreciated by 7.3%. JPMorgan Chase & Co’s stock gained 8.4% - the best daily performance since May 2009.
Industrial and energy sectors rallied as well. S&P’s commodity sector gained 5.9%.
Mario Draghi, ECB President, stated that the central bank is ready to play a bigger, yet limited role in the resolution of the eurozone's debt crisis. The ECB will take every steps possible to curb the inflation. Some analysts suggest that Draghi’s comments could be treated as a sign of possible interest rate cuts during next week’ ECB meeting.
Corrado Passera, Italian Minister of Productive Activities, warned that Italy’s economy is under the risk of falling into recession.
