Leading into this morning, it would have been a natural assumption that Italian Prime Minister Mario Monti's announcement that he will step down early to make way for February elections would send the markets into free fall. Higher Italian bond yields signaled concerns about the departure's impact on much-needed financial reforms. But Wall Street shrugged at the news, and at 10:55 a.m. EST, the Dow Jones Industrials (DJINDICES: ^DJI ) had managed to gain 32 points despite no obvious progress on fiscal-cliff negotiations.
Among Dow stocks, Hewlett-Packard (NYSE: HPQ ) posted the biggest gain, rising 3.7%. Rumors that activist investor Carl Icahn might be interested in taking a stake in the company sent shares higher. More interesting, though, are Dell (UNKNOWN: DELL.DL ) CEO Michael Dell's statement that he looked at Autonomy but concluded it was overpriced, setting the stage for HP to pick up the company. Investors should expect the Autonomy scandal to keep affecting share prices for the foreseeable future.
JPMorgan Chase (NYSE: JPM ) , meanwhile, is down 0.75%. A new paper from the Bank of England and the FDIC (link opens PDF) outlined how contingency plans for dealing with the failure of a systemically important institution like JPMorgan might be handled in a future crisis, contrasting it with the somewhat haphazard way problems were handled during the 2008 financial crisis. The apparent need for increased regulation is never a positive for the bank, and shareholders may be responding appropriately.
Finally, McDonald's (NYSE: MCD ) is up more than 1% after announcing a 2.4% rise in global same-store sales for November. Perhaps the most surprising news was that U.S. sales gained, even when analysts had expected a drop. New advertising promoting McDonald's value proposition, along with modest economic strength, appears to be favorable for the company, and investors are hoping McDonald's has finally hit bottom after a rough patch for the stock in 2012.
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