Stocks On The Rebound

Simon Constable explains how news out of Europe is lifting the Dow.
7:32 | 11/10/11

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Transcript for Stocks On The Rebound
Ringing the bell this morning. And that is -- opening bell for this Thursday November 10 hello everyone I'm Stephanie sigh in New York Dow futures were up this morning after yesterday's big -- there's a lot to talk about. So joining me now is Simon constable from the Wall Street Journal Simon welcome good morning to you. Good morning see it's so it looks like we -- starting the day here with the rise on some news out of Europe and first of all. Let's talk about Greece a new prime minister. I understand -- a respected economist what impact is that having on the markets. I'm it seems to be stabilizing it because in the NBA the absence of and -- -- ritual. That this guy is going to be. Out of a narrow lead up on that's about the best we can -- -- pop -- but I must -- -- leader. That's good he says the new government will -- to secure and implement the decisions all of the -- 177. Billion -- European debt deal agreed upon after months of living in negotiations and that was falling a -- And that's -- -- -- the last prime minister left -- southern markets as saying OK that's good he's gonna get down to business and that and deal with backs. I'm not sure whether that will be successful but that's what he's saying and that's what everybody is is as hang hope on -- -- yesterday's sell off which was which was huge. We're calling it will -- three things the ball and -- cross the spaghetti sell off. Comic panel and he collapsed just a little hole to do way of that but -- -- -- Ingenious very creative bad you sign and ask about. Now we now would you do during your lunch break -- -- -- Big developments out of Italy as well in some ways their political situation nearing that of Greece but also -- -- on sale that went better than expected to tell us about that yeah. Where it was credible and inspected and -- winds -- and that was strong demand for twelve month bonds which and on his T bills than not the UST bills these -- T bills I'm from the Italian government. But here's the bad news because there is a bad news component to this. Is that they have to pay of a 6% to yield on the -- -- -- interest they have to pay to borrow money for one year. Is close to twice what it was just a few months ago -- were paying three and a half percent of the and assemble -- all of these securities back in October so the cost of pouring money for the Italian government is now huge. Which is why we got -- -- of those those you know the you know Paula nice -- figures -- stuff because. Back it ended the focus on Italy is is really what's going on what happens to -- yes it's important. But it's absolutely -- must of that -- if Lee goes well actually is a huge economy. The third largest economy in Europe that -- if it if they defaulted on their debt that would be far more serious injuries are right it let's get back stateside here it is Thursday which of course means we got new numbers this morning I'm jobless claims and they were down. To 390000. The third decline in four weeks. Simon does this represent a turnaround at this point. If -- get -- continuing like this yes it will be a -- around around if if they can continue. 22222. Things one -- continue to go down which is good and to continue to be below 400000 which is a critical level. We -- about the level that when -- claims of jobless claims -- below that level you get jobs growth in the economy we have seen enough of that for a you know for yet anything like enough class to get the jobs. You know the jobs growth happening in the economy one thing I would now is yet again the prior week's number was revised -- summit originally came in at 397000. It was revised up with I think I mention this last week last Thursday that it the -- -- Past performance was -- -- might be revised of his revised up from three money some -- 400000 no lawful when it's happening every single week. It's on -- as a little little sort of wearing. Com and everybody can't quite as much face and the number when there are priced at this week after week okay also out this morning and this does seem to be positive news that trade deficit. Error of 4% in September. Falling to its lowest point this year -- foreign sales of American made autos airplanes heavy machinery all pushing exports. To an all time high but what should we read. Out of this big picture -- -- the big push ahead that we can protect mrs. of this will be a positive full growth in the US economy. I'm because while -- -- -- a trade deficit that is typically. Com act and a negative to to economic growth it -- it seem that way and it's just as of about how to have a very sort of a simple calculation the big event is the lower our economic growth so the -- -- small lot. Means we will have more economic growth. The -- bad knees a little wrinkle in -- -- -- Catholic imports only rose point 3% exports rose massively one point 4%. Those imports being weak that's -- because the economy here is so weak. And -- -- and that's basically saying that that import as a -- okay. The consumer -- not so strapped for cash that we want -- -- as much stuff for the holiday season because we don't expect to sell much stuff so effect could be seen has been negative but overall I think missing can be seen as quite a positive. OK we've got more companies coming out with earnings today headlines so far. OK yes -- this is the big one but asking our opt out -- Covert dust and -- there was saying look -- -- Big retailer posted profit rent increase of 20%. That continued growth -- his -- -- interesting strategy focusing on. Private and exclusive brands with big a -- so this is very good that doing very well we like that's that's the big one that's a look at tonight. Yeah and that falls on the heels of Macy's reporting nice earnings yesterday OK let's talk about video game -- maker -- preparing to go public. But some longtime employees could get short changed in the process what are we talking about here. Yet this is not good news so so when you join us stock up in Silicon Valley or intact planned shortly -- they typically done how much cash so they've been healthy stock options. Because they know it's a risky but it risky bet fee to join a startup which does not much money but if it goes well you've got rich off the stock options 1000 injuries sang how we gave to -- can have them back. How many sets a very bad precedent in my view and this is just my opinion and it gets back to mats out all the all old saying that cash is king. So you know I'm basically if they give you the cash they carry taken away from you they given you the stock options -- -- -- taken aback at -- remember a top -- on the -- -- on the string -- -- run down. Okay what was account so numb and goes back a little way wire of this this cartoon cat with Withrow the the -- echoing on the -- string and that as the -- and closed his hand recalling would be -- A way you revive the -- and that's what this seems like. And that sounds good I mean we'll have to continue to follow that story. OK anything else you're watching on this very -- Thursday. We will be watching carefully very very closely -- and I think that is absolutely -- Qaeda that have we done to any mosque as out of Italy wouldn't take much investors are very jittery -- wanna know things are gonna go well. Silvio Berlusconi has said he will resign -- hasn't gone yet so there's a lot of uncertainty around that will say about that will be -- be focusing on. Okay Simon constable look at Wal-Mart look at the Dow before we leave you up a 116. Points as we leave you -- on this Thursday. Simon -- with the Wall Street Journal thanks thanks Simon have a good day. -- --

This transcript has been automatically generated and may not be 100% accurate.

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