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LONDON (MarketWatch) -- European stock markets bounced higher in early trading Wednesday, shrugging off a downgrade of Italy by Moody's Investors Service, with bank stocks climbing sharply following a late rally on Wall Street. .
While bank executives and government leaders have been reluctant to acknowledge that the hundreds of billions of euros of Greek debt held by financial institutions is worth far less than its face value, they are slowly accepting the grim reality, as investors, clients and lenders grow increasingly wary.
On Tuesday, Deutsche Bank said it would not meet its profit goals for the year, citing investor uncertainty and losses on Greek bond holdings. Government officials are debating dismantling Dexia, the large French-Belgian bank, and warehousing its troubled assets in a bad bank.
LONDON (MarketWatch) -- Goldman Sachs on Wednesday downgraded Societe Generale SA to neutral from buy, saying risks for French banks have risen due to their large balance sheets, high wholesale liquidity needs and reduced prospects for bulking up their capital levels.
LUXEMBOURG (Reuters) - Pressure is building for European ministers to provide financial aid to banks burdened by toxic euro zone debt, as fears Greece may be just weeks from default threatened to choke the region's money markets.
FRANKFURT (MarketWatch) -- A final September purchasing managers index reading released Wednesday confirmed a contraction in private-sector activity across the euro zone. Markit said its composite PMI for the 17-nation region came in at 49.1, down from 50.7 in August and broadly in line with a preliminary reading of 49.2. A reading of less than 50 indicates a contraction in activity, while a reading of more than 50 signals growth.