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Even the Eurozone Debt Crisis Gets a Vacation …But Not For Long

The Eurozone debt crisis has taken a late summer vacation. Since it would be very inconvenient for a disaster to erupt while everyone is on holiday, it doesn't.

That's not to say this rule is infallible. One year, all the decision-makers went on holiday in late July, and came back to find themselves embroiled in World War I.

What traders and decision makers will find waiting for them when they get home from the beach could be almost as serious. Here's why...

A Laundry List of Problems

Greece has done nothing to redeem its position other than prepare an application for more money. Italy's GDP declined by 0.7% in the second quarter, and we are shortly to enter the run-up to the next Italian election.

What's more, Spain is trying desperately to avoid asking for a bailout, and may just succeed in doing so, but one more hiccup in its recalcitrant provincial governments will push it over the edge.

Then there's Portugal, which has entered a deep recession, and is showing signs of missing its budget targets again.

And that laundry list of potential problems doesn't include the biggest one of them all.

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Eurozone Debt Crisis Won't Be Fixed by "Bailout Lite"

The market red ink this morning (Monday) around the globe is the result of a usual suspect - Spain.

These days, if someone even sneezes in Madrid, Barcelona, or Córdoba (one of my favorite places, actually), investors go into intensive care all over the world.

This new Spanish influenza has been wiping out paper value from one end of Europe to the other. This morning came word that many of the regions in the country will need help. Attention is now directed from focused support for banks to wider calls for a sovereign bailout.

And that is where the whole matter can turn nasty. Word is that we should now expect some Italian cities to be requesting money in the near future. Seems California and Pennsylvania are not the only locations where cities can go bankrupt.

The accord reached at the end of June by the Council of Europe (the EU member heads of government) to bail out Spanish banks is already derisively referred to as "bailout lite." As the beer commercials attest, this is going to be "less filling."

Unfortunately, it is the heavier version that Europe now needs.

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Five Winners in the Stock Market Today

It appears the stock market is headed for its fifth straight negative day as the markets opened lower on continued global concerns.

Any optimistic sentiments from Europe's recent summit and bailouts have passed, as Germany still is not committed to measures in the agreements.

After Spanish Prime Minister Mariano Rajoy announced surprisingly harsher austerity plans for Spain, there were riots in Madrid where more than 70 people were injured.

The stock market wasn't quite as violent, but after the U.S. Federal Reserve's minutes revealed no signs of QE3, the markets took a hit before finishing the day slightly higher. Today the market is still reeling as all three major indexes opened well in the red.

Even news of the lowest number of initial unemployment claims filed since March of 2008 could not lift the market. The Labor Department announced that initial claims seasonally adjusted came in at 350,000, down 26,000 from the previous week. Analysts had expected on average between 355,000 to 395,000 claims to be filed.

Those numbers may not be reliable, as many economists say the claims are lower due to automakers choosing to keep their plants open throughout the summer.

Typically many auto plants close for two weeks in the summer and lay off workers temporarily as the plants are prepped for new models. With higher demand this year many plants have remained open through July.

"It seems like the Labor Department is pretty adamant that this is more of a wonky seasonal adjustment than something we need to put too much stock in," Michael Hanson, U.S. economist at Bank of America-Merrill Lynch told Reuters. "The underlying trend in claims is probably still in the 370,000 range."

Those numbers are also low due to the fact that they are gathered from the holiday-shortened 4th of July week.

Even with the markets' slide today, there are still winners to be found. Here are five of the best performing stocks today:

Merck and Co. Inc. (NYSE: MRK) announced it received favorable results for its latest experimental osteoporosis drug, odancatib, and ended trials early because it worked so well. The drug is supposed to prevent bone fractures in women with osteoporosis and has been in testing since 2007.

Merck stock is up almost 4.5% as of noon.

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Eurozone Debt Crisis Gets More Costly with Spain's Latest Move

European finance ministers came to Spain's rescue Saturday, agreeing to lend the ailing nation's banking sector as much as $125 billion (100 billion euros) as part of the latest Band-Aid for the Eurozone debt crisis.

Madrid said it would detail exactly how much it needs following an independent audit report in a little over a week.

The decision to aid Spain came after a two-and-a-half-hour conference call with the finance ministers of the 17-member bloc. The substantial size was settled on to dispel any lingering doubts that the bailout wouldn't be big enough.

But a fix for Spain's banks may not be enough to save the whole country.

"This year is going to be a bad one, growth is going to be negative by 1.7%, and also unemployment is going to increase," Spanish Prime Minister Mariano Rajoy said Sunday.

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