Dow Soars 936; S&P, Nasdaq Surges 12%

123jump.com Staff
13 Oct, 2008
New York City

Stocks in New York surge more than 11% in the largest one-day gain since 1939 on the hopes that

4:30PM New York, 10:30AM Frankfurt, 6:30AM Sydney[R]– Global markets surge after the European government set aggressive plans to bailout banks and banking system. Market averages in New York surged record high in 70 years and markets in Europe closed sharply higher.[/R]

Global Markets

European leaders after a weekend of discussions offered national plans to support banks and also take direct stakes in banks that will wipe out many shareholders. The European governments offered €1.16 trillion to support banks in Germany, France, Spain and Austria. UK will take direct stakes.

Stocks in New York surged 11% in the largest one-day gain 70 years and in Europe soared 11% and in Asia closed up 7%. European governments decided to inject $1.7 trillion capital to support bank loans and take direct stake in banks. Crude oil price rebounds 5% lifting energy complex stocks around the world. Banks rise in the U.S. and Europe but UK banks trade mix. UK agreed to take majority stakes in troubled Royal Bank of Scotland and a substantial stake in HBOS and Lloyds TSB Group Plc after it injected 37 billion pounds.

Mitsubishi UFJ completed its purchase of 21% stake in Morgan Stanley after lowering the conversion price of the convertible stock to $25.25. The stock pays 10% dividend. It is not clear if Mitsubishi UFJ will be given shares if Morgan Stanley stock falls further or raises capital at a lower price.

Banks in New York traded sharply higher after European government announced a bank bailout plan of $1.8 trillion. The huge fiscal support lifted markets in Europe, New York and Asia. Apple surged. Insurance companies rallied. Steel, mining and energy companies gained on a rise in metals and oil prices.

North American Markets

Dow Jones Industrial Average surged 936.42 or 11.08% to a close of 9,387.61, S&P 500 Index closed up 104.13 or 11.58% to 1,003.35, and Nasdaq Composite Index soared 194.74 or 11.81% to close at 1,8844.25. In Toronto markets were closed today.

Of the 30 stocks in Dow Jones Industrial Average 29 closed higher and 1 closed lower.

General Motors Inc led gainers in the index with a rise of 33.2% followed by increases in Alcoa Inc of 22.8%, in Chevron Corp of 20.8%, in Microsoft Corp of 18.6% and in American Express of 17.8%.

General Electric was the lone decliner in the Do Jones Industrial Average with a loss of 2.3%.

Of the stocks in S&P 500 index, 480 increased, 20 declined and none was unchanged. Of the index stocks, 457 rose more than 3% and 10 fell more than 3%. And 297 stocks surged more than 10%.

Huntington Banc led the decliners in the S&P 500 index with a fall of 8.7% followed by losses in New York Times of 7.2%, in Dillard’s Inc of 5.2%, in M&T Bank Corp of 4.3%, in Sears Holdings of 4.3% and in Zions Bancorp of 4.2%.

Morgan Stanley led the gainers in the S&P 500 index with a surge of 87% followed by gains of 80.6% in Genworth Financial, in Prudential Financial of 38%, in XL Capital Ltd of 36%, in Southwestern Energy of 36.7%, in United Health Group of 34.7% and in General Motors of 33.2%.

South American Markets Indexes

Brazil led gainers in the region with a rise of 14.7% followed by increase in Peru of 13.7% in Chile of 12.5%, in Mexico of 11%. Markets in Colombia and Argentina were closed today.

Venezuela closed up 0.8%.

Europe Markets Review

In London FTSE 100 Index closed higher 324.80 or 8.26% to 4,256.90, in Paris CAC 40 Index increased 355.01 or 11.18% to close at 3,531.50 and in Frankfurt DAX index higher 518.14 or 11.40% to close at 5,062.45. In Zurich trading SMI increased 609.10 or 11.39% to close at 5,956.32.

Asian Markets Review

Hang Seng index in Hong Kong increased 1,515.29 or 10.24% closed to 16,312.16. CSI 300 index in China higher 78.53 or 4.12% closed to 1,985.49. ASX 200 index in Australia increased 220.00 or 5.55% to close 4,180.70. The KL Composite index in Malaysia higher 16.75 or 1.79% closed to 950.76. Market of Tokyo was closed today.

The Kospi Index in South Korea increased 47.06 or 3.79% to close at 1,288.53. SET index in Thailand closed higher 24.37 or 5.39% to 476.33, and JSE Index in Indonesia increased 10.20 or 0.70% to 1,461.87. The Sensex index in India increased 804.38 or 7.64% closed to 11,332.23.

Commodities, Metals, and Currencies

Crude oil increased $4.09 to close at $81.79 a barrel for a front month contract, natural gas increased 17 cent to $6.70 per mBtu and gasoline futures increased 11.34 cents to close at 192.04 cents per gallon.

Wheat futures closed up 25.00 cents in Chicago trading and closed at $5.88 a bushel. Sugar increased 0.47 cent to 11.70 cents a pound. Soybean future closed up 18 cents to $9.28 a bushel.

Gold decreased $23.90 in New York trading to close at $835.10 per ounce, silver closed up $0.26 cents to $12.03 per ounce and copper for the front month delivery increased 19.550 cent to $2.34 per pound.

Dollar edged higher against euro to $1.3571 and gained against yen to 102.08.

Yields on 10-year U.S. bonds increased to 3.98% and with 30-year maturities increased to 4.14%.