U.S. Stocks Gain

U.S. stocks rose after the economy contracted less than forecast in the third quarter and investors speculated global interest-rate cuts will stem a further slump.

Intel Corp., Merck & Co. and Alcoa Inc. gained more than 5 percent after the government said the economy shrunk 0.3 percent last quarter. Colgate-Palmolive Co. climbed 7.4 percent on better-than-estimated earnings. The advance added to a global rally after Hong Kong joined the U.S. in lowering borrowing costs and the Federal Reserve provided $120 billion to spur lending in emerging markets.

The Standard & Poor's 500 Index jumped 24.03, or 2.6 percent, to 954.12 at 10:16 a.m. in New York. The Dow Jones Industrial Average added 213.3, or 2.4 percent, to 9,204.26. The Nasdaq Composite Index increased 46.01, or 2.8 percent, to 1,703.22. Eleven stocks rose for each that fell on the New York Stock Exchange.

Russia's benchmark index rallied 18 percent, South Korea's climbed 12 percent and the Czech Republic jumped 9.2 percent after the Fed provided $120 billion to spur lending in emerging markets. Hong Kong's Hang Seng Index surged 13 percent and Taiwan's Taiex jumped 6.3 percent after their central banks lowered rates.

Canadian stocks rose a third day, led by mining and energy companies, after the U.S. economy shrank less than expected and central banks cut borrowing costs around the world. The Standard & Poor's/TSX Composite Index rose 1.4 percent to 9,636.72 at 9:59 a.m. in Toronto, extending its biggest two- day rally in 32 years.

Brazilian stocks rallied for a third day after the central bank halted six months of interest-rate increases yesterday and the Federal Reserve gave Brazil a $30 billion credit line to help it overcome the credit crisis. The Bovespa gained 2,099.54, or 6 percent, to 36,944.75 at 10:22 a.m. New York time.

U.K. stocks rallied for a third day after central banks around the world cut interest rates, raising speculation that lower borrowing costs may help revive the financial system and economic growth. The FTSE 100 Index gained 103.93, or 2.5 percent, to 4,346.47 at 1:49 p.m. in London, as all but 12 stocks advanced.

German stocks rose after the Federal Reserve cut interest rates to stem a slump in the world's biggest economy and earnings from Deutsche Bank AG, Metro AG and Volkswagen AG exceeded analysts' estimates. The benchmark DAX Index added 190.55, or 4 percent, to 4,999.24 at 2:59 p.m. in Frankfurt.

Japan stocks soared, sending the Nikkei 225 Stock Average to its sharpest three-day advance in at least 38 years, as a gain in commodity prices and a weaker yen boosted the profit prospects for resource companies and carmakers. The Nikkei 225 climbed 817.86, or 10 percent, to close at 9,029.76 in Tokyo, the fourth-biggest gain in its 59-year history.

Australian S&P/ASX 200 Index climbed 155.50 points, or 4 percent, to 4,001.10 at the close in Sydney.

China's stocks rose, led by financial companies, after the central bank lowered borrowing costs for the third time in two months to bolster the world's fourth-largest economy. The CSI 300 Index, which tracks yuan-denominated stocks traded in Shanghai and Shenzhen, rose 39.43, or 2.4 percent, to 1,697.66 at the close.

TradingEconomics.com, Bloomberg.com
10/30/2008 8:14:37 AM