U.S. Stocks Advance

U.S. stocks rose for the first time in five days after the Federal Reserve said it will purchase short- term corporate debt to help unfreeze credit markets.

General Electric Co., Caterpillar Inc. and Alcoa Inc. added more than 2 percent on speculation companies will be able to raise money more easily. Advanced Micro Devices Inc. rallied 16 percent on plans to spin off its manufacturing plants as part of an $8.4 billion investment from Abu Dhabi. European shares extended gains after the Fed announced the plan.

The Standard & Poor's 500 Index increased 4.09 points, or 0.4 percent, to 1,060.98 at 10:28 a.m. in New York. The Dow Jones Industrial Average added 46.75, or 0.5 percent, to 10,002.25, a day after falling below 10,000 for the first time in four years. The Nasdaq Composite Index rose 0.1 percent to 1,864.

The S&P 500 rebounded from its lowest level in almost five years while the Dow recovered from an almost four-year low after the Fed invoked emergency powers to create the special commercial-paper fund. The two indexes plunged more than 3.5 percent yesterday as bank bailouts in Europe widened.

Most Canadian stocks rose, led by raw-materials producers, after commodities rallied and the U.S. Federal Reserve said it will buy short-term corporate debt to help unlock credit markets. The Standard & Poor's/TSX Composite Index added 2.16 points, or less than 0.1 percent, to 10,232.59 at 10:06 a.m. in Toronto.

European stocks rose as Australia's bigger-than-expected interest-rate cut spurred speculation central banks around the world will reduce borrowing costs to unlock frozen credit markets. The benchmark DAX Index gained 0.9 percent to 5,436.79 as by 4 p.m. in Frankfurt, after falling as much as 1.6 percent.

U.K. stocks advanced, rebounding from the biggest slump in more than twenty years yesterday, led by BP Plc and Royal Dutch Shell Plc as the price of crude oil rallied. The benchmark FTSE 100 index gained 81.43, or 1.77 percent, to 4,670.58 at 3:49 p.m. in London. The index plummeted the most since Oct. 20, 1987 yesterday, led by banks and mining companies on concern the credit crisis is deepening and as metals plunged.

Russian stocks fell, extending yesterday's record drop, as a plan by President Dmitry Medvedev to lend $36 billion to banks wasn't enough to convince investors the government can halt its worst financial crisis since 1998. he Micex Index fell 4.5 percent to 717.83, after losing 19 percent yesterday to the lowest since August 2005.

Asian shares pared declines today after Australia's central bank reduced interest rates by the most since 1992.

Japan's stocks slumped, sending the Nikkei 225 Stock Average to its lowest close in almost five years, as the seizure in credit markets curbed demand for the nation's exports and threatened to worsen the economic slowdown. The Nikkei Average fell 317.19, or 3 percent, to close at 10,155.90 in Tokyo after dipping below 10,000 for the first time since Dec. 10, 2003. The broader Topix index dropped 21.44, or 2.2 percent, to 977.61. More than four stocks retreated for each that gained on the gauge.

Australian stocks rallied and bonds jumped after the nation's central bank cut benchmark interest rates by one percentage point, the biggest reduction since 1992. The S&P/ASX 200 Index added 1.7 percent to 4,618.70 at the close in Sydney, reversing an earlier loss of 0.5 percent immediately before the decision. The index has lost almost a third of its value this year amid a credit freeze triggered by the U.S. subprime mortgage crisis.

Indian stocks fell, with the benchmark Sensitive Index holding at a 2-year low on concern surging credit costs will deepen a global slowdown. The Bombay Stock Exchange's Sensitive Index, or Sensex, slid 0.9 percent to 11,695.24. The index held at its lowest since Sept. 12, 2006.

China's stocks fell for a second day, led by raw-material and energy companies, extending a global rout after commodity prices slumped and Aluminum Corp. of China Ltd. forecast a profit decline. The CSI 300 Index, which tr...

TradingEconomics.com, Bloomberg.com
10/7/2008 8:18:55 AM