31 Dec 2008

Wall St climbs

11:15 am on 31 December 2008

Stocks in the United States climbed on Tuesday after the government expanded its bailout of the auto industry.

The Bush Administration is to extend an additional $US1 billion loan to General Motors and take a $US5 billion stake in the automaker's financing arm, GMAC, in the latest move to ease the credit crisis.

On Tuesday, GMAC announced easier financing terms for car and truck buyers and GM announced 0% financing for some vehicles.

GM rose 5.6% to $US3.80, while Ford added 3.2% to $US2.29.

Rohm & Haas jumped 11.9% to $US59.70 after the Financial Times reported Dow Chemical could tap a $US13 billion bridge loan or renegotiate the price to salvage a $US15 billion takeover of the company.

The deal was jeopardized after Kuwait scrapped a joint venture with Dow Chemical over the weekend, depriving Dow Chemical of financing it planned to use for the acquisition. Dow rose 1.5% to $US15.55.

The Dow Jones industrial average rose 184.46 points, or 2.17%, to 8,668.39.

Standard & Poor's 500 Index gained 21.21 points, or 2.44%, to 890.63. The Nasdaq Composite Index added 40.38 points, or 2.67%, to 1,550.70.

The S&P is up almost 18% since hitting an 11-year low on 20 November, but is still down about 40% for 2008.

Volume was slim on the New York Stock Exchange, where about 948.8 million shares changed hands. About 1.4 billion shares were traded on the Nasdaq.

Other markets

Earlier, the European FTSEurofirst 300 index closed 1.74% higher at 824.47 points.

In Frankfurt, the DAX index ended at 4810.2 points, up 105.34 or 2.24%. In Paris, the CAC-40 index closed at 3217.13 points, up 86.41 or 2.76%.

The Swiss market index closed at 5534.53 points, up 69.57 or 1.27%.

In Britain, the FTSE 100 closed up 73.33 points, or 1.7%, at 4,392.68, after a rise of 2.4% the previous session.

However, activity was light, with just over 427 million shares changing hands.

The index is down 32% this year to date. The markets close at 1230 GMT on Wednesday.