US stocks extended gains this afternoon after an announcement from the Slovakian government that lawmakers had reached a deal to expand the eurozone rescue fund.
By 4.10pm (London time), the Dow Jones had risen 0.82% to 11,509.58, while the S&P 500 had gained 1.17% to 1209.5. In London, the FTSE 100 was inching towards the 5500 mark, hitting an intraday high of 5458.02.
Voting continues in Europe
Slovak leaders were scrambling to secure approval for a stronger eurozone rescue fund this afternoon after the government failed to ratify the expansion of the European Financial Stability Facility (EFSF) fund last night.
Later this afternoon, however, the Slovak opposition party leader announced that a deal had been reached to approve expansion of the EU's bailout fund this week, removing the final obstacle to enhancing the eurozone's government bailout fund. Voting to officially approve the fund will take place later this week.
Meanwhile, in Italy, Silvio Berlusconi's government was braced for a confidence vote after Italian president Giorgio Napolitano issued an unusually blunt statement which expressed deep concern over the ability of Mr Berlusconi's government to deliver on promised economic reforms.
The Italian leader, who came under renewed pressure to step down last week following a number of well-publicised lewd comments, suffered another embarrassment last night after he failed to pass a routine budget provision.
Mr Berlusconi plans to address the Italian parliament on Thursday, with a confidence vote likely to take place the following day.
Further proposals for the eurozone
Spread betting market sentiment was lifted this afternoon ahead of a speech by European Commission president Jose Manuel Barroso, who is expected to propose a roadmap out of the eurozone crisis as well as a plan for recapitalising European banks.
The speech comes after French president Nicolas Sarkozy and German chancellor Angela Merkel agreed on a plan to recapitalise banks before the G20 summit in Cannes at the end of the month.
Investors also became cautiously optimistic after the Eurogroup chairman Jean-Claude Juncker suggested ten steps for solving the eurozone crisis.
Mr Junker’s proposals included bank recapitalisation, the introduction of a financial transaction tax, stronger regulation of financial markets, automatic sanctions for fiscally irresponsible governments, greater authority for the commission and a dividend for taxpayers who rescue banks.
Alcoa gets US Q3 earnings season underway
In shares spread betting, alcoa, the largest US aluminium producer, kick-started the third-quarter US earnings season last night by announcing that recession fears were knocking prices for the metal lower.
The aluminium producer offered a downbeat outlook, warning that growth was slowing sharply in the second half of the year while regional demand was falling in North America, Europe and Brazil.
Alcoa shares took a hit in late trading last night after the aluminium maker reported a third-quarter profit improvement that came up well short of Wall Street targets. Alcoa posted a profit of $172 million, or 15 cents a share, up from $61 million, or 6 cents a share, a year ago.
Sales rose to $6.42 billion from $5.29 billion a year earlier. However, spread betting analysts were looking for earnings, on average, of 22 cents a share. Shares in Alcoa were down over 4% to $9.85 by this afternoon.
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'Spread Betting Market Sentiment Lifted Ahead of Barroso Crisis Speech', Article by IG Index, last update: 12-Oct-11
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