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Friday, October 21, 2011

US Stocks claw back from deep losses (ext)

NEW YORK (CNNMoney) -- Will Europe get its act together? It's anyone's guess, but for now, investors are cautiously optimistic.

U.S. stocks ended mixed Thursday, as European leaders confirmed that they will meet multiple times over the next week to approve a key plan to resolve Europe's debt crisis.

Investors also breathed a sigh of relief after the Greek parliament passed the latest package of austerity measures.

The Dow Jones industrial average (INDU) finished 37 points higher, or 0.3%, and the S&P 500 (SPX) added 6 points, or 0.5%. The tech-heavy Nasdaq composite (COMP) lost 5 points, or 0.2%.

Earlier in the session, the three major indexes were down about 1% as jittery investors reacted to headlines questioning whether the summit of European leaders scheduled for this weekend would take place, and whether anything substantial would result from it.

But those nerves were calmed following a joint statement from French President Nicolas Sarkozy and German Chancellor Angela Merkel. The leaders said that the elements of a comprehensive response to Europe's debt crisis will be discussed in depth at Sunday's European Council summit, and a plan will be adopted by next Wednesday, at the latest.

"Incrementally, we're seeing European leaders take steps in the right direction, but there are still a lot of moving parts and unanswered questions," said Phil Orlando, chief equity market strategist at Federated Investors.

Despite progress over the last few weeks, Orlando said there isn't a lot of confidence in the market as to whether European officials will "do the right thing" or act in a timely manner.

And even if a "resolution" is reached soon, investors are wondering what that will actually mean for Europe's financial future, said Joe Saluzzi, co-head of equity trading at Themis Trading.

"There isn't going to be a day where we wake up and say, 'Oh, Europe's debt crisis has been resolved,'" said Saluzzi. "The problems there have been years in the making, and they won't be fixed in a weekend."

The dollar fell against the euro and the British pound, but rose versus the Japanese yen.

Oil prices fell following official reports that deposed Libyan leader Moammar Gadhafi has been killed.

Oil for November delivery dropped 81 cents to settle at $85.30 a barrel, while oil for December delivery, the more active contract, declined 22 cents to settle at $86.07.

Gold futures for December delivery slid $34.10 to settle at $1,612.90 an ounce.

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