U.S. SUMMARY: Shares bounce back; dollar gains

Index Change Percent change

*DJIA 11019.69 +410.03 +3.86

*Nasdaq 2199.10 +100.25 +4.78

*S&P 500 1206.51 +186.88 +1.57

Nymex crude $97.88 +72 cents

10 yr US

treasury 3.53 percent

*Thursday’s close

STOCKS: Wall Street rallied in a stunning late-session turnaround Thursday, shooting higher and hurtling the Dow Jones industrials up 400 points following a report that the federal government might create an entity to absorb banks’ bad debt.

The report that Treasury Secretary Henry Paulson is considering the formation of a vehicle like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s left previously solemn investors ebullient.

Wall Street hoped a huge federal intervention could help financial institutions jettison bad mortgage debt and stop the drain on capital that has already taken down companies including Bear Stearns Cos. and Lehman Brothers Holdings Inc.

FOREX: The dollar gained Thursday following a report that the government was considering another market rescue in the form of relieving banks of their real-estate-related debt.

The dollar traded up to 105.65 yen, while the pound slid to $1.8172 and the euro fell to $1.4323.

BONDS: Government bond prices edged lower Thursday as investors remained anxious about the congested financial system, but hopeful that the government might come up with a solution to get the credit markets functioning again. For the second straight day, investors were mainly focused on the shortest maturities.

OIL: Oil prices rose modestly but closed well off their session highs Thursday as a late-day stock market rally soothed investors’ concerns about the economy and demand for energy. Earlier, the contract topped $100 a barrel as investors uneasy about the worsening financial crisis flocked to commodities as a safe haven.

METALS: Gold briefly shot above $900 an ounce Thursday as panicky investors poured money into safe-haven assets, but the metal later gave back its gains on a report that the government may move more aggressively to steady the teetering financial system.

Gold for December delivery jumped as much as $75.50, or 8.8 percent, to $926 an ounce on the New York Mercantile Exchange before easing back to settle at $897, still up $46.50. In aftermarket trading, prices fell $36.30 to $860.70 an ounce.

Other precious metals ended higher Thursday. December silver jumped $1.025 to settle at $12.70 an ounce on the Nymex. December copper rose 2.35 cents to settle at $3.006 a pound, while October platinum gained $51.30 to $1,137.60 an ounce.

ASIA SUMMARY: Shares rebound; dollar up

Index Change Percent change

Nikkei 225 11863.70 +374.40 +3.26 (0425 GMT)

S&P/ASX 200 4796.70 +189.40 +4.11 (0425 GMT)

Hang Seng 18715.79 +1,083.33 +6.14 (0425 GMT)

Seoul Composite 1457.95 +65.53 +4.71 (0425 GMT)

BSE Sensex 13769.62 +454.02 +3.41 (0430 GMT)

usd-yen 106.73 (Intra-day trade)

STOCKS: Asia-Pacific nations kept up their efforts on Friday to shield the region from the fallout of Wall Street upheaval even as stock markets rallied in response to emergency action from the world’s top financial authorities.

Japan and Australia pumped a further $20 billion into their money markets as lending remained tight despite Thursday’s unprecedented $180 billion made available by the U.S. Federal Reserve to the global banking system.

New Zealand relaxed rules on collateral to ease funding conditions and South Korea’s central bank chief promised to act aggressively and supply enough cash to the financial system to calm markets.

The Chinese government was also trying to stabilise markets, buying shares in three of the biggest state-owned banks and ditching a tax on purchases of stocks.

BONDS: Japanese government bond futures tumbled on Friday as share prices soared on reports that the U.S. government is working on a plan to address systemic risks in U.S. markets and deal with problem assets of financial firms.

The benchmark 10-year yield rose 4 basis points to 1.525 percent while five-year yields rose 3 basis points to 1.150 percent after rising to a two-month high of 1.155 percent.

FOREX: The dollar jumped against the euro and the yen on Friday, boosted by news that the U.S. government is considering a comprehensive plan to deal with the toxic bank assets causing the credit crisis.

OIL: Oil rose for a third day on Friday, edging above $98 a barrel on growing U.S. and Nigerian supply concerns even as the dollar jumped on an emerging U.S. government plan for a comprehensive solution to the financial crisis.

METALS: Gold rallied on Thursday, extending record gains, as investors bought security while central banks poured fresh liquidity into roiled money markets.

EUROPE SUMMARY: Shares mixed; dollar lower

Index Change Percent change

*FTSE 4880.00 -32.40 -0.66

*DAX 5863.42 +2.44 +0.04

*CAC 3957.86 -42.25 -1.06

*Thursday’s close

STOCKS: European stocks ended lower on Thursday after a rollercoaster session, as a coordinated move by the world’s leading central banks to ease the credit squeeze failed to halt the equities sell-off that started on Monday.

Britain’s top share index ended 0.7 percent lower on Thursday in choppy trade as volatility reigned despite a concerted move by central banks to boost liquidity and Lloyds TSB’s deal to buy HBOS.

Investors were also edgy ahead of Friday’s futures and options expiries.

FOREX: Sterling trimmed gains in late European trade as the dollar benefited from a rebound in U.S. stocks triggered by coordinated central bank action to help beleaguered money markets.

At 1358 GMT, the pound was up 0.3 percent at $1.8194, after hitting a session high of $1.8276. It also recovered somewhat against the euro, trading at 79.08 pence from a low of 79.62.

BONDS: Euro zone government bond yields rose on Thursday as major central banks said they would offer overnight dollars to ease a global funding crunch, helping stocks rally and curbing flight to quality flows.

Ten-year Bund yields were 5.6 basis points up at 4.036 percent.

OIL: In London, November Brent crude added 35 cents to end at $95.19 a barrel on the ICE Futures exchange

METALS: Gold rallied on Thursday, extending record gains, as investors bought security while central banks poured fresh liquidity into roiled money markets.

Spot gold traded at $879.20/881.00 at 1042 GMT, up 2 percent from $862.70 an ounce at the nominal New York close on Tuesday.

Source: http://www.afxnews.com

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