US stocks will get a lift today after Eurozone finance ministers agreed to lend Spain up to €100bn (£80.8bn) to help its battered banks.
The surprisingly large amount of aid removes a huge cloud that has been hanging over financial markets, with investors fearing that a banking crisis in the Eurozone’s fourth-largest economy could have compounded the currency bloc’s troubles with Greece.
Though the exact amount to be lent will be decided in just over a week, striking a deal now means Spain has added support in case Greece’s June 17 elections throw financial markets into a tailspin.
US stocks are coming off their best week of 2012, in large part due to expectations that something would be done for Spain’s banks.
For Wall Street, anything that diminishes fears over Europe is welcome news. The broad S&P 500 index fell 6.3 per cent in May, its largest percentage drop since September, as the Eurozone debt crisis worsened.