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Pre-Market Primer: Spanish Banks Get a European Bailout, But...


Spanish bond yields are still up!

MINYANVILLE ORIGINAL Stocks are rallying today as markets react to this weekend's news that Spain will receive help to save its troubled banks.

After insisting that outside help will not be necessary, Spain will be accepting as much as 100 billion euros in loans to recapitalize its banks. Spain's own bank restructuring program proved inadequate as so many of its banks have been burdened with non-performing loans.The exact amount is not yet decided, and the bailout will come from either the European Financial Stability Facility or the European Stability Mechanism.

Markets are reacting positively to the news. At the open, London's FTSE (^FTSE) jumped nearly 100 points at the open before drifting back towards Friday's closing price. Spain's IBEX (^IBEX) surged 5.3% and also trailed down again. Spanish bond yields also dropped significantly, but spiked back up, breaking 6.4% for the 10-year bond.

US futures are also up this morning. Dow (^DJI) futures are up 0.44% at 12,558.00 while S&P 500 (SPY) futures rose 0.42% to 1,327.60. Futures on the Nasdaq (^IXIC) gained 0.46% to 2,568.75. Oil contracts also rallied, gaining 1.34% to $85.23/barrel this morning.

Over the weekend, some interesting data came out of China. In May, industrial production increased by 0.89%, or 9.6% over last year, and the country's trade surplus climbed to $18.7 billion from $18.4 billion. Retail sales climbed 0.84% over April, or 13.8% on a yearly basis.

Apple (AAPL) will start its Worldwide Developer Conference today. Apple is likely to unveil new products, including a refresh of the MacBook Pro and new software such as 3D maps for the iPhone. Though Apple's plans are typically under wraps, there are plenty of rumors of a new iPhone for release later this year. We might find out what's been cooking in Cupertino this week.

While Apple's iPad absolutely dominates the tablet market that Apple invented, Google (GOOG) is partnering up with ASUS to produce a Google-branded Android tablet that could be available as early as the Google I/O conference later this month.

General Electric (GE) is considering spinning off its large lending unit, the Wall Street Journal reports. Though GE Capital's assets shrank considerably after the financial crisis, the unit's share of the conglomerate's earnings have grown. Still, investors are skittish about owning what amounts to one of the country's biggest banks, and GE might break off its consumer financing business.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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