On Tuesday, U.S. stocks rose in ahead of the upcoming EU summit later this week, during which financial leaders will discuss doubling the region’s rescue fund.
“The market wants to go higher,” explained Dan Veru of Palisade Capital Management. “Europe is finally talking on a constructive manner to solving its problems. If they come up with something that’s credible, this market has another 7% to 10% to the upside.”
“It’s very unrealistic to think that could disappoint us again when expectations are so high. If they do come out with a credible plan I think it’s going to help sustain the rally, so everyone is watching and waiting.”
Skrainka of a Financial Times report said “I take all of these rumors with a grain of salt. We won’t know for certain until they come out with a plan.” The report resulted in a short surge that lifted all three indexes into positive levels.
The paper reported that EU leaders are negotiating the formation of two separate rescue funds aimed at resolving Europe’s debt crises. With citations of senior European officials, the paper explains that they are considering leaving the current rescue fund open even when the new one is established next year.
“The unfortunate piece of this entire puzzle is what if we have another summit and walk away with nothing? NO news would be a greater disaster here because we have greater expectations than Charles Dickens ever wrote about,” said Art Hogan of Lazard Capital Markets.