Global Equities briefly extended their gains this afternoon after German chancellor Angela Merkel and French president Nicolas Sarkozy said they had reached an agreement on a plan to help resolve the Eurozone debt crisis.
By 4pm (London time) the FTSE 100 had retreated from its intraday high of 5602.80, and was up by 0.44% at 5576.74. Across the pond, Wall Street was over 1% higher with the S&P 500 up at 1263.94 and the Dow 144.14 points higher at 12,163.56.
'Merkozy' agree on a plan
Nicolas Sarkozy and Angela Merkel met today after being under intense pressure to agree on a plan for imposing budget discipline across the Eurozone. Following the meeting in Paris, the two leaders emerged for the long-awaited news conference, where Mr Sarkozy announced that they had (finally) agreed upon a plan.
The 'plan', which is hoping to solve the Eurozone debt crisis, will be written up in a letter and presented to European Council president Herman Van Rompuy on Wednesday.
Mr Sarkozy said that the two leaders prefer a treaty among the 27 EU members, but they are open to a treaty among the 17 Eurozone members, which would be open to any state that wants to join. This treaty would contain automatic sanctions in the event of a breach of the rule on deficits below 3% of GDP.
Ms Merkel added that at Friday's EU summit, leaders will attempt to regain confidence and trust. She said that they will propose structural changes which go beyond agreements and (once again) reiterated her stance against the idea of eurobonds.
Ms Merkel finished optimistically by saying that the two leaders are determined to keep the euro as a stable currency and as an important contributor to European stability.
Positive streak of US data takes a break
US economic data released this afternoon showed that new orders for factory goods fell in October for the second straight month, suggesting a possible softening in the manufacturing sector, despite ISM manufacturing numbers last week showing an improvement. Orders for manufactured goods decreased 0.4% after a 0.1% drop in September.
Meanwhile factory orders (excluding transportation) rose 0.2%, while orders for durable goods (manufactured products expected to last three years or more) fell 0.5%, a smaller decline than initially estimated.
The data, though on the disappointing side, had little impact on the spread betting markets as investors were relieved that Mr Sarkozy and Ms Merkel have agreed upon a plan which is aimed at ending the two-year long Eurozone debt crisis.
TUI travel on the right path
The world's biggest tour operator, TUI Travel, reported a better-than-expected full-year profit today despite unrest in Africa and the Middle East and weakening consumer sentiment.
The company said it had managed to grow sales and profit in Britain because of its greater online presence and the high proportion of a 'differentiated product' offering, compared to other travel companies. The travel company had said it also benefited from appealing to a broader demographic of customer than its rival Thomas Cook
The group, which takes 30 million people on holiday each year, announced operating profit for the year to September rose 18% to a record £471 million. TUI Travel's shares, which have gained 29% over the last two weeks after Thomas Cook customers switched to TUI Travel, surged to 185.58p this morning, though it fell almost 1% by the afternoon to 168p.
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