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Stocks jump in Europe and US on hopes of rescue for Spanish banks

On a day that Moody's downgraded the safety rating of six German banks over the eurozone debt crisis, major stock indexes that have been roiled by the crisis rose 2 percent on the Spanish rescue hopes.

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Getco Securities traders Philip Finale (l.) and its floor official Peter Giacchi (r.) work on the floor of the New York Stock Exchange on June 6.

Bebeto Matthews/AP

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Concerns for the health of European banks took center stage for global financial markets Wednesday, as hopes rose that eurozone nations would agree on a support package for the ailing Spanish banking system.  

Major stock indexes in Europe and the US jumped more than 2 percent.

The financial markets, however, have been roiled in recent weeks by concerns over the fate of Europe's currency union – with more downward pressure than uplift for share prices. It remains to be seen how Spain's crisis will be resolved, and a volatile Greek election is less than two weeks away.

Nations including Greece and Spain face a combination of high unemployment and debt-induced austerity. The risk of a messy breakup of the eurozone, with one or more nations exiting, has weighed on stock prices even in the US and other nations outside Europe.

On Wednesday, the positive expectations of a bailout for Spain were accompanied by new reminders of the risks if things don't go well. Six German banks saw their safety ratings downgraded by a prominent credit-rating firm – a sign that Europe's debt crisis affects even the largest economies.

Moody's Investors Service announced the credit rating cuts on Wednesday, while also downgrading the German subsidiary of the Italian bank UniCredit.

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