Dow Set to Surge on EU Deal


LONDON -- The Dow Jones Industrial Average (INDEX: ^DJI) looks set to surge this morning following news that Europe's political leaders have agreed on a deal to support Spanish banks and provide potential assistance for Italy.

In early premarket trading, the benchmark index was set to jump 1% higher and extend a 152-point rally that occurred during the final 90 minutes of yesterday's trading.

On the domestic front, a raft of economic statistics may influence trading today, with numbers for personal income, consumer spending, consumer sentiment, and manufacturing activity scheduled to be released throughout the morning.

Among individual stocks, Research In Motion (NAS: RIMM) is likely to endure a rough session. Following last night's close, the BlackBerry developer watched its stock drop 16% to $7.70 after revealing a 33% sales collapse and a first-quarter loss of $192 million. RIM also admitted the launch of its new BlackBerry 10 smartphone would be delayed until next year.

Another stock set to head lower today is Nike (NYS: NKE) . Yesterday's fourth-quarter figures from the sportswear group came in below expectations, with Q4 revenue up 12% to $6.5 billion and net income down 8% to $549 million. Premarket trading suggests the stock may dive 12% to around $12.

In Europe, shares marched higher following news that German Chancellor Angela Merkel had backed down during this week's EU summit and effectively approved the pooling of eurozone sovereign debts. The agreement should allow cash-strapped European nations access to rescue funds while still retaining the power to run their economies.

Markets in Germany, France, Italy, and Spain all jumped 2% on the finer details, with banks leading the charge. Individual shares moving 4%-plus higher included France's BNP Paribas, Spain's BBVA, and Italy's UniCredit.

In the U.K., the FTSE 100 (INDEX: ^FTSE) reacted to the EU summit news by climbing 1%.

However, one share lagging the broad-based rally was Barclays (NYS: BCS) , which lost another 1% as chief executive Bob Diamond said he wouldn't resign from the bank, but would instead appear before a U.K. parliamentary committee to answer questions about his company's behavior.

Yesterday, Barclay's shares plunged 15% after the bank was fined 290 million pounds for rigging the London interbank lending rate.

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