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European markets are called to open higher this morning.


Asian stocks rallied the most in a week and South Korea’s won strengthened as better-than-forecast earnings at Apple Inc. (AAPL) and signs U.S. lawmakers are closer to a deal on raising the debt ceiling supported demand for riskier assets. The euro weakened against the dollar and yen.


The Dow industrials staged their strongest one-day rally of the year Tuesday after President Obama indicated that lawmakers are closer to reaching an agreement on raising the debt ceiling.

The Dow Jones industrial average (INDU) gained 1.6%, or 202 points — its largest rise of 2011. Of its 30 components, 27 were in the black.

“Obama came on television and it seemed like there was significant progress on the debt ceiling,” said Phil Streible, senior market strategist with Lind-Waldock. “Suddenly there was a lot of optimism.”

The S&P 500 (SPX) added 21 points, or 1.6%; and the Nasdaq (COMP) gained 61 points, or 2.2%.

The nation could face default if lawmakers fail to raise the debt ceiling by the Aug. 2 deadline. The so-called “Gang of Six” proposal considered by senators earlier in the day plans to cut $3.7 trillion over the next ten years.

“The good news is that today a group of senators, the ‘Gang of Six,’ Democrats and Republicans… put forward a proposal that is broadly consistent with the approach that I’ve urged,” the President said in an afternoon press conference.

Events this week

Wednesday — Before the bell, Dow member United Technologies will report its quarterly results along with S&P members BlackRock and Altria .

The National Association of Realtors will release their June existing home sales data as well.

After the bell, Dow members American Express , and chipmaker Intel will issue their quarterly results.

Thursday — Before the bell, Dow members AT&T and Travelers will report their results. Also reporting on Thursday is Morgan Stanley, who is expected to post a loss of 62 cents a share.

On the economic front, the Labor Department issues its weekly jobless claims data at 8:30 a.m. ET. The Philadelphia Federal Reserve will release its July manufacturing survey at 10 a.m. ET.

Economists surveyed by Briefing.com expect weekly jobless claims rose to 411,000 claims last week compared with the 405,000 claims reported the week before.

Federal Reserve Chairman Ben Bernanke is scheduled to testify in front of the Senate Banking Committee starting at 10 a.m. ET on Thursday. The chairman is speaking on the Dodd-Frank financial regulatory reform law.

After the bell, investors will get earnings results from Intel competitor Advanced Micro Devices as well as software giant Microsoft. Analysts expect to earn 58 cents a share, according to Thomson Reuters.

Friday – Four Dow components report their quarterly results on Friday: Verizon , General Electric, Caterpillar and McDonald’.

Analysts expect that Verizon earned 55 cents a share last quarter, while GE earned 32 cents a share, McDonald’ had a profit of $1.28 per share and Caterpillar earned $1.79 a share.

Other names reporting on Friday include former Dow member Honeywell (HON, Fortune 500), imaging company Xerox and oil company Schlumberger.

There’ no scheduled economic data out this day.