The sands of time are sinking, but it still looks as if stocks want to take one
more shot at the upside before the year-end rally runs into heavy resistance
(probably during the first half of December). After Wednesdays smash, a few
pieces of cheerful news popped up Thursday and again Friday enough to hoist the
Dow over 350 points across those two days, out of danger territory for now.
First, that key gauge I told you to watch in Tuesdays blog Italian 10-year bond
yields eased to about 6.5% at the end of the week. Italy certainly isnt out of
the woods yet. However, its a relief that the countrys government-bond yield
fell back below the perilous 7% threshold. Recall, it was a spike above 7% that
forced Greece, Ireland and Portugal to seek bailouts from the EU. Italys public
debt, at $2.6 trillion, is bigger than those other three nations combined. So if
Italys borrowing costs really were to ring the 7% plague bell for more than just
a day or two, theres good reason to fear that Europes financial woes would
quickly escalate. In other upbeat news this week, the Labor Department reported
that its weekly count of
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