A roundup of trading on major world markets:
NEW YORK – US stocks rallied sharply Monday after Germany and France pledged over the weekend to find a solid plan to address the eurozone debt crisis and shore up European banks within weeks.
The Dow Jones Industrial Average leaped 330.06 points (2.97 per cent) to finish at 11,433.18.
The broader S&P 500 surged 39.43 points (3.41 per cent) to 1,194.89, while the tech-heavy Nasdaq Composite gained 86.70 points (3.50 percent) to 2,566.05.
Stocks piled up gains “after government leaders in Germany and France said they would develop a plan to recapitalise banks by the end of the month,” said Sameer Samana at Wells Fargo Advisors.
Trade was thinner than usual with much of the country, including federal and local governments, as well as the bond market, on holiday for Columbus Day.
All 30 Dow blue chips ended higher just ahead of the third-quarter earnings season that kicks off Tuesday after the market closes, with Alcoa the first Dow component to report.
Alcoa leaped 3.9 per cent Monday, while Caterpillar jumped 4.8 per cent.
Financials benefited from hopes that Europe will boost the capital of its banks suffering from the public debt crises in Greece, Ireland and Portugal.
Bank of America surged 6.4 per cent, JPMorgan Chase was up 5.2 per cent and American Express added 4.7 per cent.
Apple leaped 5.1 per cent after saying pre-orders of the new model of its hit iPhone 4 smartphone topped one million units in the first 24 hours, a record for an Apple product.
LONDON – European shares and the euro have jumped as investors cheered a Franco-German pledge to shore up European banks in news that coincided with a cross-border dismantling of troubled lender Dexia.
At closing on Monday, London’s FTSE 100 index added 1.80 per cent at 5,399 points.
In Frankfurt, the DAX rallied 3.02 per cent to 5,847.29 points and in Paris the CAC-40 climbed 2.13 per cent to 3,161.47 points.
Elsewhere in Europe, Milan rallied 3.67 per cent, despite news before the weekend that Fitch had cut credit ratings on Spain and Italy. Madrid shares increased by 1.07 per cent, Lisbon by 2.39 per cent, Zurich by 1.17 per cent and Amsterdam by 1.74 per cent.
The European single currency jumped to $US1.3675 in London foreign exchange deals from $US1.3375 late in New York on Friday. The dollar fell to 76.66 yen from 76.87 yen on Friday.
In a meeting on Sunday, French President Nicolas Sarkozy and German Chancellor Angela Merkel put on a united front and vowed a response to Europe’s debt and banking crisis within weeks.
The deadline for the response is an EU summit now to be held on October 23 and the modalities are to be thrashed out until then in closed door talks.
The pledge came as Greece called on Monday for improved debt rollover terms from its private creditors at the end of talks with the EU and the IMF on an audit to unlock fresh loans, a plea sure to send further tremors to troubled banks.
Sarkozy said there would be “lasting, global and quick responses before the end of the month” amid growing fears of another crippling global credit crunch.
HONG KONG – Asian shares were mostly higher Monday after France and Germany announced an agreement to support Europe’s banks while US jobs data also supplied some unexpected good news.
Dealers remained cautious after Wall Street finished last week with a loss and Fitch downgraded Italy and Spain’s debt ratings.
Sydney closed 0.92 per cent, or 38.1 points, higher at 4,201.0 after adding 3.8 per cent last week – its biggest weekly gain in more than a year, while Seoul closed 0.38 per cent, or 6.67 points, up at 1,766.44.
Singapore also closed higher, rising 1.06 per cent at 2,668.30 points, while Hong Kong, which surged around nine per cent in the previous two sessions, ended flat, edging up 4.05 points, to 17,711.06.
But Shanghai lost 0.61 per cent, or 14.42 points, to close at 2,344.79 in the first trading day after the week-long Golden Week holiday.
Tokyo and Taipei were closed for public holidays.
WELLINGTON – Wellington closed 0.32 per cent, or 10.61 points, lower at 3,372.85.
Telecom fell 1.5 per cent to NZ$2.56.
