A roundup of trading on major world markets:
NEW YORK – US stocks rose Wednesday following an upbeat report on durable-goods orders and amid hopes that the US central bank chief might endorse new stimulus measures later this week.
The Dow Jones Industrial Average rallied 143.95 points (1.29 per cent) to close at 11,320.71. The broader S&P 500 rose 15.25 points (1.31 per cent) to 1,177.60, while the tech-heavy Nasdaq Composite added 21.63 points (0.88 per cent) to close at 2,467.69.
US stocks have risen for the past three days, regaining some of the ground they lost during a long slide in which the Dow slumped for four weeks amid fears of a slowing US economy and Europe’s debt crisis.
Early Wednesday, the US Commerce Department gave the market a boost when it said new orders for durable goods rebounded 4.0 per cent in July from June, lifted by a surge in aircraft orders.
Separately, Federal Reserve chairman Ben Bernanke is set to give a speech on Friday which will be closely watched for signs of whether he endorses a further loosening of monetary policy to boost the sluggish US economy.
Banking stocks performed strongly on Wednesday, led by Bank of America, which surged 11.0 per cent.
Its stock fell sharply earlier this week amid doubts about the strength of its capital base, leading some analysts to declare it undervalued.
JPMorgan Chase gained 3.0 per cent for the day, while Goldman Sachs was up 3.2 per cent and Citigroup was up 4.1 per cent.
Bond prices slumped. The yield on the 10-year Treasury note climbed to 2.26 per cent from 2.14 per cent late Tuesday, while that on the 30-year bond rose to 3.61 per cent from 3.48 per cent.
Bond prices and yields move in opposite directions.
BRUSSELS – Stocks in Europe rose as investors awaited potential new action from the US Federal Reserve to kick start the world’s largest economy.
In a sign of the wild movements seen on financial and commodities markets in recent weeks, the price of gold, which had surged in recent weeks as investors fled into save-haven assets, plummeted 4.4 per cent to $1,779, more than $US100 ($A95.17) below a new record reached just days ago.
Markets are likely to continue fluctuating ahead of Friday’s speech by Fed Chairman Ben Bernanke at an economics conference in Jackson Hole, Wyoming. Investors hope Bernanke will signal a third round of massive bond-buying to boost the faltering US recovery.
Buoyed by this hope, Britain’s FTSE 100 closed 1.5 per cent higher at 5,205.9 points. Germany’s DAX jumped 2.7 per cent to 5,681 and France’s CAC-40 added 1.8 per cent to 3,139.5.
Fresh data out of the eurozone indicated that some businesses are already preparing for potential troubles.
Germany’s closely watched Ifo index of business optimism fell more than expected in another negative signal about Europe’s largest economy. The index fell to 108.7 for August from 112.9 in July. Market analysts had expected a smaller drop to 111.0.
Oil prices rallied after US crude supplies unexpectedly fell last week. Benchmark oil for October delivery jumped 67 cents to $86.05 a barrel on the New York Mercantile Exchange. In London, Brent crude for October delivery gained $1.44 cents to $110.75 on the ICE Futures exchange.
The euro slipped 0.3 per cent to $1.439, while the dollar rose 0.1 per cent to 76.76 yen.
HONG KONG – Tokyo stocks fell 0.19 per cent, giving up early gains on an overnight surge on Wall Street and the yen’s slight drop after a downgrade by Moody’s of Japanese sovereign debt.
The benchmark Nikkei-225 index of the Tokyo Stock Exchange, which opened up 0.91 per cent, lost steam as most other Asian markets fell.
It ended the morning session down 16.25 points at 8,716.76 and the broader Topix index of all first-section issues lost 1.72 points or 0.23 per cent to 748.67.
The yen weakened only slightly after Moody’s lowered Japan’s government bond rating to Aa3 from Aa2.
WELLINGTON – The New Zealand share market rose strongly in early trade and gave up some of those gains as the day progressed but still closed higher.
Some stocks recovered from oversold positions and earnings results continued to reward loyal investors.
The benchmark NZX-50 index closed up 17.938 points, or 0.549 per cent, at 3287.524 after being up 41.58 points in early trading.
New Zealand Oil and Gas was unchanged at 62 after reporting a full-year net loss of $75.9 million, including provisions and losses of $98.8 million related to the Pike River Coal mine disaster.
