A roundup of trading on major world markets:
NEW YORK – US stocks bounced back after dramatic see-saw session Tuesday following a report that EU ministers were looking at possible plans to aid weak banks.
Down two per cent just 45 minutes before the close, the Dow Jones Industrial Average rocketed in the final minutes to end 153.41 points higher (1.44 per cent) at 10,808.71.
The broader S&P 500 jumped 24.72 (2.25 per cent) to 1,123.95, while the tech-heavy Nasdaq Composite added 68.99 points (2.95 per cent) to 2,404.82.
Most of the day was clouded by the impasse over Greece’s debt, and the news of the move to protect Dexia after European traders dumped its shares on fears it would become the first major European institution to fall victim to eurozone debt crisis.
Also weighing on the markets was Federal Reserve chief Ben Bernanke’s glum presentation on the US economy to a Congressional panel Tuesday.
Bernanke told legislators their budget-cutting fervor could threaten an already “faltering” recovery.
Big US banks, whose stocks have undergone some of the most violent swings in the markets in recent weeks, scored solid gains in the last minutes. Bank of America closed up 4.2 per cent, Citigroup added 5.5 per cent and JPMorgan Chase jumped 6.6 per cent.
Apple shares closed down 0.6 per cent — after losing 5.2 per cent in afternoon trade — following its launch of a new iPhone, dubbed the 4S, which was not the next-generation iPhone 5 many fans had hoped for.
Bond prices fell. The 10-year Treasury bond yield rose to 1.78 per cent from 1.75 per cent late Monday, while the 30-year yield went to 2.76 per cent from 2.72 per cent.
Bond prices and yields move in opposite directions.
LONDON – Europe, following Asia, posted substantial losses.
Fears the eurozone debt crisis could be about to snare the banks spiked after shares in Franco-Belgian bank Dexia lost a third of their value before recovering to close with a loss of about 20 per cent as it became clear a government bailout was in the works.
Responding to the turmoil, France and Belgium said they would guarantee the debts of the troubled cross-border bank that had to be saved in 2008 as the global financial crisis deepened with the collapse of Lehman Brothers.
In Europe, London’s FTSE-100 index of leading shares lost 2.58 per cent to 4,944.44 points. In Frankfurt, the DAX tumbled 2.98 per cent to 5,216.71 points and in Paris the CAC-40 shed 2.61 per cent to 2,850.55 points.
Elsewhere in Europe, Madrid lost 1.54 per cent, Lisbon 2.18 per cent, Milan 2.72 per cent, Amsterdam 2.02 per cent and Brussels 3.13 per cent.
In London trade, the euro slumped to $1.3146 — the lowest level since mid-January. It later stood at $1.3284, up from $1.3178 late in New York on Monday.
The single currency meanwhile edged back up to 102.14 yen after having traded earlier at 100.76 yen — the lowest level since 2001.
Dexia, which specialises in providing financing to local authorities especially in France, could be the first major banking victim of the eurozone debt crisis, brought down by a credit crunch.
Data from the European Central Bank showed eurozone banks deposited the biggest amount of overnight funds at the ECB so far this year in a signal that interbank lending has frozen.
Eurozone finance ministers on Monday said they would once again delay releasing a much-needed eight billion euros to Greece to help it meet its debt obligations after Athens admitted it would miss its deficit targets.
Eurogroup chairman Jean-Claude Juncker said Monday that eurozone partners had asked the Greek government to take moves to ensure further savings in 2013 and 2014.
HONG KONG – Asian markets mostly tumbled.
Tokyo fell 1.05 per cent on Tuesday, or 89.36 points, to 8,456.12, while Seoul slumped 3.59 per cent, or 63.46 points, to 1,706.19.
Sydney ended 0.64 per cent, or 24.9 points, lower at 3,872.1 and Hong Kong was 0.64 per cent down a day after the index slumped to its lowest level in more than two years.
Shanghai was closed for a public holiday.
The losses followed another slump on Wall Street, where the Dow shed 2.36 per cent to finish at its lowest level since September 2010. The S&P 500 fell 2.85 per cent and the Nasdaq lost 3.29 per cent.
Eurozone finance ministers on Monday said they would once again delay releasing a much-needed 8 billion euros ($A11.12 billion) to Greece to help it meet its debt obligations, saying it needed to do more to qualify for the cash.
On currency markets, the euro, which sank to fresh lows on Monday in New York, was slightly higher in early Asian trade.
The unit bought $1.3210 after diving to $1.3178, its lowest since January, while it edged up to 101.27 yen from a 10-year low of 100.96 yen in New York.
It also edged up slightly to 1.2143 Swiss francs from 1.2137.
The dollar bought 76.68 yen from 76.59 yen.
Japan’s Finance Minister Jun Azumi on Tuesday called for the swift passage of the rescue package for Greece to reassure markets and help stem the yen’s recent surge against the euro, which is hammering the country’s exporters.
WELLINGTON – New Zealand stocks rose on Tuesday as their relatively attractive yields and a falling New Zealand dollar helped the local bourse shrug off the worst of the global sell-off in equities.
