It was quite the day with both credit and stocks trading heavy in the morning.

In the course of about 5 minutes, stocks popped higher with the S&P closing more than 2% higher.

The S&P stock index was down 2% in the morning; talk about a large intra-day move!

The headline that sparked the rally was that EU (European Union) finance ministers will seek to coordinate bank aid.

We've seen this movie before and it has almost always ended in tears.

But this time may be different.

If the Europeans slash interest rates in a coordinated fashion and start buying bonds in the secondary markets, we may very well get a (temporary) reprieve.

Late in the day, Moody's downgraded Italy; ironically, this increases the likelihood of a coordinated European intervention in the markets.

New Jersey Governor Chris Christie officially announced that he will not seek the Republican Presidential nomination.

Anyone who actually thought that Christie had a winning shot was smoking something very strong.

Despite all the press opprobrium, Texas Governor Rick Perry appears best positioned to win the Republican nomination.

More importantly, if the polls are any guide, Perry may be the only Republican candidate with a broad enough appeal to have a winning shot in the general election.

Somewhat quietly, the "Wall Street protests" have been picking up steam with financier George Soros empathizing with protesters' grievances.

Wall Street runs the risk of facing a significant political backlash after enjoying taxpayer aided bail-outs over the past few years.

That it is an election year will only complicate things.

It is through this prism that players are watching the funding picture and the dramatic widening in credit spreads for banks such as Morgan Stanley.

Most eyes will be on Europe until Friday's U.S. employment and payroll numbers.