Markets around the world jumped on news of an agreement among eurozone countries to use bailout funds to directly recapitalize struggling banks, a move that should help bring down Italian and Spanish borrowing costs. Leaders at the EU summit seemed to indicate that easing those borrowing costs is a top priority that must be carried out before further steps can be taken to shore up the currency union. Investors applauded the news as major indexes in Asia jumped over 1% and the German DAX and French CAC 40 climbed more than 2.5%.
Dow Jones Industrial Average (INDEX: ^DJI) futures were up more than 1% before markets opened. Dow cyclicals and financials appear to be headed for an especially strong day, up 2% and 3%, respectively, in premarket trading.
Expect BlackBerry maker Research in Motion (Nasdaq: RIMM) to take a dive today. Shares are already down 17% in premarket trading after the company reported a surprise $518 million quarterly loss. RIM also said it would lay off 5,000 employees -- a third of its workforce -- and that its Blackberry 10 operating system will be delayed until 2013, while analysts had expected it to debut this fall.
Highlighting Europe's weight on the global economy, apparel king Nike (NYSE: NKE) also spooked shareholders with a disappointing quarter as net income fell for the first time since 2009 -- a 7.6% drop to $549 million. Higher costs and slower sales in Europe were the key factors keeping down profits for the Swoosh, though on the bright side, revenue rose 12%. Shares were down 12% in premarket trading. Ford (NYSE: F) also signaled that losses in Europe would be about three times as large as previously expected.
Two economic reports come out later this morning. At 9:45 a.m. EDT, the Chicago Purchasing Manufacturers Index will be released, with the market looking for a June figure of 53 after last month's 52.7. The University of Michigan Consumer Sentiment Index comes out shortly after at 9:55 a.m. EDT, and economists are predicting the same 74.1 rating for June as in May. The Conference Board Consumer Confidence Index released earlier this week came in two points lower than expected.
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