Carrefour SA, the world's second-largest retailer, slid 3 percent and General Motors Corp. dropped 3.7 percent in European trading as crude climbed for a fourth day. Mitsubishi UFJ Financial Group Inc. rose more than 4 percent in Japan after U.S. Treasury Secretary Henry Paulson announced plans to buy soured mortgage securities and provide $400 billion to guarantee money-market mutual funds.
Europe's Dow Jones Stoxx 600 Index slipped 0.7 percent to 276.15 as of 1:20 p.m. in London, following its steepest advance on record Sept. 19. Futures on the Standard & Poor's 500 Index fell 0.6 percent after the measure's biggest two-day gain since the aftermath of the 1987 crash. The MSCI Asia Pacific Index added 2.6 percent.
The MSCI World Index climbed 0.7 percent, extending its three-day gain to 8.7 percent after the U.S. government announced plans to halt the credit-market seizure and American, British, German, French, Dutch, Belgian, Australian and Taiwanese regulators cracked down on short selling.
The measure for 23 developed countries retreated 7.2 percent in the first three days of trading last week after Lehman Brothers Holdings Inc. and American International Group Inc. collapsed and Merrill Lynch & Co. was forced to sell itself to Bank of America Corp.
Paulson's rescue plan would allow the government to buy a variety of mortgage-related securities to relieve a freeze in credit markets. Democrats, who control both houses of the U.S. Congress, pledged not to slow down its passage or tie it to an economic stimulus plan.
The Federal Reserve yesterday approved bids by Goldman Sachs Group Inc. and Morgan Stanley to become banks, ending the ascendancy of the securities firms 75 years after Congress separated them from deposit-taking lenders.
BaFin, the German financial regulator, banned short positions in companies including Deutsche Bank AG and Commerzbank AG for the rest of the year. France's Autorite des Marches Financiers and Belgium's Banking, Finance and Insurance Commission imposed a three-month ban for Fortis, Dexia SA, Credit Agricole SA and other firms.
Asian stocks surged, led by financial and commodity companies, after the U.S. government proposed buying $700 billion of bank assets and Australia and Taiwan restricted the short sale of equities.
The MSCI Asia Pacific Index gained 2.8 percent to 117.35 as of 7:32 p.m. in Tokyo, extending Sept. 19's 5.5 percent jump. The measure's gauge of financial stocks, which ended last week at the lowest price-earnings ratio this decade, was the biggest contributor to today's gains.
Japan's Nikkei 225 Stock Average rose 1.4 percent to 12,090.59. NGK Insulators Ltd. soared after lifting its profit forecast.
China stocks surged to a two-week high. Bank of China Ltd., the nation's third-largest lender, and Citic Securities Co. both surged by the daily 10 percent maximum for a second day. China Life Insurance Co. and Ping An Insurance (Group) Co., the country's two biggest insurers, also climbed by 10 percent.