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Pre-Market Primer: Stocks Rise Amidst More Grexit Speculation


Which way is the wind blowing in this week's European Union summit?

MINYANVILLE ORIGINAL Stock futures headed higher today on better-than-expected US retail sales
Retail sales in the United States rose 1.1% on a monthly basis in September, after rising 0.9% in August. Economists predicted an increase of 0.7%. Excluding autos and gasoline, sales increased by 0.9% versus the forecast of 0.5%. The New York Federal Reserve Board's Empire State Manufacturing Index for October improved over September's -10.41 to -6.41.

The Dow Jones Industrial Average (INDEXDJX:.DJI) gained 0.39% to 13,297.00, S&P 500 (INDEXSP:.INX) gained 0.53% to 1,429.10 and Nasdaq (INDEXNASDAQ:.IXIC) futures rose 0.69% to 2,728.75.

Speculation of a Greek exit from the eurozone is back in focus at the European Union's summit in Brussels this Thursday. Swedish finance minister Anders Borg very frankly predicted a "Grexit" in the next six months, saying, "[I]n practice everyone already understands which way the wind is blowing."

The bond markets, however, are showing faith in Greece. Today, the 10-year yield on Greek debt fell to 17.5%, the lowest level since the country's debt restructuring in March. This follows a broad trend of Greek debt rallying since March.

At the two-day summit, EU leaders will also discuss matters such as banking union integration, fiscal budget unification, and the looming bailout of Spain. Rumors of a joint loan program for Greece, Spain, and Cyprus are circulating ahead of the meeting.

Over the weekend, a report on Chinese inflation showed that China still has room to ease policy with more pro-growth measures. Consumer prices increased by just 1.9% on a yearly basis.

Sprint (NYSE:S) shares jumped more than 8% after Japanese telecommunications firm Softbank confirmed that it will take a 70% stake in Sprint. Japanese investors punished Softbank, as shares dropped 8%. Sprint is the third-biggest mobile operator in the United States.

"This is pro-competitive and pro-consumer in the US because it creates a stronger No. 3," Sprint CEO Dan Hesse told reporters in Tokyo. "It competes with the duopoly of AT&T (NYSE:T) and Verizon (NYSE:VZ). When you look at what Softbank has accomplished in Japan with the No. 3 carrier, it's something we can learn from."

Citigroup (NYSE:C) will report earnings after the bell today. Despite peers JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE:WFC) beating expectations for the past quarter, analysts are concerned that profit margins for the big nationwide lenders are shrinking. Citigroup shares advanced slightly before the bell.
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