Stocks set to rally as investors eye Europe

By msnbc.com news services

Stocks are set to rally at Wednesday?s open, as investors remain focused on developments in Europe.

Before the open, the ECB left interest rates at 1 percent, dashing some market expectations that it might move quickly to combat fears about the health of the euro zone.

Markets were unsure how the ECB would react to the recent wave of weak economic data, knowing that the bank also wants to keep the pressure on euro zone leaders to tackle the crisis more effectively.

Fears that the problems in Europe are hurting the global economy have also increased speculation that other major central banks could join in another global round of policy easing.

The U.S. Federal Reserve releases Beige Book of regional economic conditions at 2:00 p.m. ET.

A steep decline in the market last week took the S&P 500 down more than 3 percent for the week.

General Motors' struggling European unit Opel has emerged from its worst-ever sales crisis in Germany and now expects to gradually expand its slice of the market back into the double digits, a level not seen since 2005.

Facebook Inc is making it easier for advertisers to reach the growing ranks of users on smartphones and mobile devices, taking a significant step toward addressing one of investors' most pressing concerns and broadening its appeal to marketers.

Spain said it is losing access to credit markets and appealed to its European partners to help revive its banks, a distress signal sure to intensify global pressure on Europe to move faster to the aid of its fourth-largest economy.

The European Commission will propose far-reaching powers for regulators to deal with failing banks on Wednesday, a step towards the banking union the ECB has urged to secure the euro's future.

Moody's Investors Service cut the credit ratings of six German banking groups and Austria's three largest banks on Wednesday, saying they face risks if the euro zone crisis deepens.

U.S. stocks rose on Tuesday, recovering some ground from last week's selloff, as data showing the vast U.S. services sector improved in May outweighed investor angst about the euro zone's fiscal crisis.

Reuters contributed to this report.

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