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US, European markets seesaw as Sarkozy, Merkel plan to meet

Reuters/Philippe Wojazer

US stocks rose sharply at opening Thursday as European markets seesawed. French President Nicolas Sarkozy called a meeting with German Chancellor Angela Merkel to discuss the eurozone debt crisis.

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The Dow Jones was up 97.71 points (0.91 per cent) in the first 15 minutes of trade, while the S&P 500 gained 11.09 points (0.99 per cent) and the Nasdaq surged 31.03 points (1.3 per cent).

European markets went up, then down, then up again during the day, with Paris’s Cac 40 recovering 0.52 per cent in the early afternoon.

Buffeted by rumours that they were at risk because of their exposure to Greek and Italian debt, French banks had trouble recovering from the previous day’s troubles.

Société Générale lost 0.18 per cent, Crédit Agricole gained 0.68 per cent, BNP Paribas was down 1.90 per cent and Axa down 1.57 per cent.

Dossier: Eurozone in crisis

Sarkozy’s declaration that he would meet Merkel next Tuesday was credited with stopping Wednesday’s fall, which led to trading on Société Générale shares being suspended briefly on Thursday morning.

Sarkozy and Merkel hope to prevent Italy and Spain going into default.

France’s securities regulator, AMF, threatened to act against anyone spreading “unfounded rumours concerning banking shares listed in Paris” after the SocGen debacle.

Spreading and profiting from baseless rumours is “subject to penalty”, an AMF statement said.

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