Wall Street gains but Europe debt worries persist

United States stocks prices rose on Monday but were off their highs after a report that Germany and other European nations with top credit ratings could be downgraded shook some of the recent optimism about the euro zones outlook.Standard and Poor was poised to announce later on Monday that the credit ratings of Germany, the Netherlands, Austria, Finland and Luxembourg would be credit watch negative, according to a Financial Times report.Head of equity research at Louis Capital in New York, Robbert Van Batenburg said Its more like they want to put them on a watch negative by the end of the day. I believe that its most likely a way for S&P to pressure euro zone leaders to put forth a substantial agreement by the end of the week. Because, just like everybody else, theyre sick and tired of the European wavering. The markets dont like this back and forth.The news poured cold water on the market, which jumped at the opening on increased hopes that European leaders will find a solution to the regions debt crisis at a summit on Friday.The S&P financial sector moved up by 1.9 per cent, still led gains.French President Nicolas Sarkozy and German Chancellor Angela Merkel met in Paris, and Sarkozy said a proposed agreement between the two countries would be sent to EU officials on Wednesday ahead of Fridays summit.The Dow Jones industrial average was up by 60.28 points, or 0.50 per cent, at 12,079.70. The Standard & Poors 500 Index was up by 11.38 points, or 0.91 per cent, at 1,255.66. The Nasdaq Composite Index was up 26.06 points, or 0.99 per cent, at 2,652.99.Earlier, all three indexes were trading above one per cent.Markets have struggled with the euro zones crisis for months. Hope that European policymakers were entering an endgame sent the S&P 500 to its best week in almost three years last week with a rise of 7.4 per cent.Reuters had earlier reported that the confidence that European leaders will come up with a credible plan to lead the region out of its debt crisis at a crucial summit this week lifted world stocks.It had noted that Wall Street opened more than one per cent higher, while European stocks hit a five-week high.
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