U.S. Stocks Rally

Stocks rallied and the Dow Jones Industrial Average posted its second-best point gain ever as the cheapest valuations in 23 years lured investors and increased commercial paper sales signaled credit markets are thawing.

Alcoa Inc. jumped 19 percent, leading the Dow to an almost 900-point advance, after the shares slid to their lowest price- to-earnings ratio on record. General Electric Co., the largest issuer of commercial paper, jumped 9.9 percent after sales of longer-term debt soared 10-fold yesterday as the Federal Reserve entered the market for corporate IOUs. Citigroup Inc. and Bank of America Corp. rose more than 12 percent as traders boosted bets the Fed will cut interest rates tomorrow.

The Standard & Poor's 500 Index gained 91.56 points, or 11 percent, to 940.48 after sliding to the lowest level since March 2003 yesterday. The Dow climbed 889.35 points, or 11 percent, to 9,065.12. Hong Kong's benchmark index added 14 percent, its best advance in 11 years, while Germany's climbed 11 percent and Brazil's jumped 13 percent.

Canadian stocks rebounded from their steepest drop in 21 years, led by commodity and financial companies, as investors took advantage of the cheapest share valuations on record. The Standard & Poor's/TSX Composite Index rose 7.1 percent to 9,144. Canada's main stock benchmark dropped 8.1 percent yesterday, its worst slide since October 1987's ``Black Monday,'' on speculation that the credit crisis will cause more losses at financial companies and a global recession will curb demand for Canada's commodities.

Brazilian stocks rallied the most in two weeks, joining an advance in equities around the world, after commodity prices rose and the government said it will announce measures to help homebuilders weather the credit crisis. The Bovespa index rebounded from a three-year low, rising 12.71 percent, its biggest jump since Oct. 13.

European stocks rose for the first time in six days as the Dow Jones Stoxx 600 Index traded near the cheapest relative to earnings in more than six years and BP Plc's profit topped analysts' estimates.

The Stoxx 600 advanced 0.5 percent to 196.06 at 3:01 p.m. in London. The index is down 23 percent in October, headed for its biggest monthly decline since the October 1987 crash. The measure closed yesterday valued at 7.9 times profit of the companies in the index, the lowest since at least January 2002.

National benchmark indexes climbed in 15 of the 17 western European markets that were open. The U.K.'s FTSE 100 added 2.2 percent as Aviva Plc gained. France's CAC 40 increased 1.1 percent. Germany's DAX surged 6.2 percent.

Japanese stocks rose the most in two weeks, breaking a four-day losing streak that erased almost a quarter of the Nikkei 225 Stock Average's value and sent the gauge to a 26-year low. The Nikkei 225, which lost 23 percent in the previous four days, gained 459.02, or 6.4 percent, to close at 7,621.92 in Tokyo. The gauge dropped to the lowest since October 1982 yesterday and fell as much as 2.4 percent today, sending it briefly below 7,000.

Australian S&P/ASX 200 Index fell 14.60 points, or 0.4 percent, to 3,794.60 at the close in Sydney, its lowest close since Nov. 1, 2004.

China's stocks rose, with the benchmark CSI 300 Index rebounding from its steepest drop in four months, as investors took advantage of the lowest valuations in at least two years. The CSI 300 Index, which tracks yuan-denominated stocks on the Shanghai and Shenzhen exchanges, rose 51.15, or 3.1 percent, to 1,705.82 at the close.

India's benchmark Sensitive Index rose, snapping a 20 percent, four-day decline, in a special one- hour trading session to mark Diwali, the Hindu festival of lights.The Bombay Stock Exchange's Sensitive Index, or Sensex, gained 498.52, or 5.9 percent, to 9,008.08 at the 7:15 p.m. close in Mumbai, the most since Oct. 13.

Russian stocks climbed for the first time in a week as investors looked for bargains worldwide, while Porsche SE's decision to boost its Volkswagen AG stake raised speculation the global equities selloff may abate. The ruble-denominated Micex Index climbed 3.2 ...

TradingEconomics.com, Bloomberg.com
10/28/2008 1:24:47 PM