The euro, European stocks and U.S. index futures rallied, erasing earlier losses, amid reports that European Union officials have come up with a plan to recapitalize struggling banks and halt a surge in bond yields.
The euro strengthened 0.5 percent to $1.4284 at 8:44 a.m. in New York after slumping as much as 0.5 percent earlier. The Stoxx Europe 600 Index increased 0.5 percent and futures on the Standard & Poor’s 500 Index advanced 0.6 percent. U.S. Treasuries fell, while Italian, Spanish and Greek bonds surged.
The euro and equities erased earlier losses as Reuters reported that a draft EU document called for a Greek “Marshall Plan” that includes an extension of bailout funds to Greece and the possible purchase of bonds in secondary markets to halt a surge in yields that has raised borrowing costs for the most- indebted nations.
Earlier, Luxembourg Prime Minister Jean-Claude Juncker said Greece may be unable to avoid default. Any euro-area agreement on a second aid package for Greece might include a selective default on the nation’s debt, though other options would be preferable, Juncker said today as officials gather in Brussels to try to resolve the region’s debt crisis.
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