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Stocks rise after Berlusconi promises to leave
STOCKS turned higher yesterday once investors got the news they had been hoping for: Italian Prime Minister Silvio Berlusconi promised to resign once a new budget was passed. The Dow Jones industrial closed up 101 points.
Italy became a key focus for investors this week after doubts emerged that the country would go through with a tough package of austerity measures. Many investors saw Berlusconi as an obstacle to sweeping economic reforms needed to help Italy avoid sinking into a debt crisis.
The yield on the 10-year Italian government bond spiked close to 7 percent yesterday, a sign that markets are questioning the country’s ability to pay its debt. Unlike Greece, Portugal or Ireland - all of which received financial lifelines - Italy has too much debt to be rescued by its European neighbors.
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