Wall Street edges up amid euro zone hope

By msnbc.com news services

Wall Street edged higher at the start of trading Tuesday, buoyed by hopes that the 17 countries that use the euro will finally come up with a plan to deal with their crushing debt crisis.

As the 17 finance ministers of the countries that use the euro converged on EU headquarters in a desperate bid to save their currency ? and to protect the global economy from a debt-induced financial tsunami ? investors were reminded of the urgency of the task at hand.

Italy's borrowing rates shot up Tuesday to above 7 percent, an unsustainable level on a par with rates that forced the others to seek bailouts.

The fear is that the crisis ? which already has forced bailouts of Greece, Ireland and Portugal ? could engulf bigger economies such as Italy, the eurozone's third-largest. If Italy were to default on its debt of euro1.9 trillion ($2.5 trillion), the fallout could spell ruin for the euro project itself and send shock waves throughout the global economy.

Though no specific details have yet emerged of what will likely result from a Dec. 9 summit of EU leaders, the ministers are thought to be discussing ideas that would have been taboo only recently: countries ceding fiscal sovereignty to a central authority; some kind of elite group of euro nations that would guarantee one another's loans ? but require strong fiscal discipline from anyone wanting membership.

On Tuesday, finance ministers also were likely to discuss the options ? plus a possible way to boost the region's rescue fund, the European Financial Stability Facility, at a meeting in Brussels.

In U.S. news, American Airlines' parent company is seeking Chapter 11 bankruptcy protection as it seeks to unload massive debt built up by years of accelerating jet fuel prices and labor struggles.

In economic news, a closely watched survey released Tuesday showed U.S. single-family home prices declined in September, highlighting the fragility of a market that is struggling to get back on its feet. A separate report showed U.S. consumer confidence bounced back from a 2-1/2 year low in November.

U.S. stocks rebounded from seven days of losses on Monday as investors used the latest effort by European leaders to resolve the region's debt crisis as an opportunity to cover short positions.

The Associated Press and Reuters contributed to this report.

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Source: http://bottomline.msnbc.msn.com/_news/2011/11/29/9090909-wall-street-edges-up-amid-euro-zone-hope

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