By and  on December 5, 2011

Europe’s markets closed on a high note Monday as German chancellor Angela Merkel and her French counterpart Nicholas Sarkozy held crisis talks in Paris aimed at forming a new treaty for the European Union.

The FTSE MIB in Milan closed up 2.9 percent at 15,926.47 while the CAC 40 in Paris rose 1.2 percent to 3,201.28. The DAX in Frankfurt climbed 0.4 percent to 6,106.09 while London’s FTSE 100 advanced 0.3 to 5,567.96.

The day’s biggest gainers included, which rose 6.8 percent to 14.53 pounds; Yoox, which advanced 3.4 percent to 10.13 euros, and Safilo Group, which rose 2.5 percent to 5.35 euros. Among the decliners were Burberry Group, down 3.3 percent to 12.72 pounds, and Hermes, off 3 percent to 223 euros.

The euro traded at $1.34 while the pound traded at $1.57.

During a joint press conference with Merkel after the crisis talks, Sarkozy said: “What has happened [in Europe] must never happen again, and it is for this reason that we want a new treaty.”

Merkel’s and Sarkozy’s proposals include sanctions against countries with public deficits of more than 3 percent of GDP, a constitutional obligation for countries to balance their accounts, and a new $673 billion bailout fund.

It is a busy week for Europe’s leaders: Italian prime minister Mario Monti took his austerity bill — which seeks partly to root out tax evasion — to parliament today, while the Irish government will unveil an austerity budget and VAT, or value added tax that will rise to 23 percent.

On Wall Street today, the S&P Retail Index rose 1.2 percent, or 6.48 points, to 538.58, as the Dow Jones Industrial Average gained 0.7 percent, or 78.41 points, to 12,097.83.The retail gainers included The Bon-Ton Stores Inc., up 15.7 percent to $3.54; Guess Inc., 4.1 percent to $29.41; Saks Inc., 2.7 percent to $9.75, and Urban Outfitters Inc., 2.3 percent to $27.70.

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