Reports of New Stimulus in China Lift Shares [NYT]
By DAVID JOLLY
Stocks rose around the world on Wednesday, as investors reacted to speculation that China may expand its stimulus measures.
Shares increased on reports that Premier Wen Jiabao of China was considering new spending measures on top of the $585 billion plan already proposed. An announcement could come as early as Thursday in China.
In early trading, the Dow Jones industrial average was 75 points or 1.1 percent higher, while the Standard & Poor’s 500-stock index rose 1.3 percent, climbing above 700. The Nasdaq rose 1.6 percent.
Producers of basic materials like steel, chemicals and plastic, which could benefit from government-financed construction projects, rose in early trading in New York. Energy shares also climbed as crude oil prices rose $2.41 to $44.06 a barrel.
The morning’s gains pared two days of losses that dragged two major stock indexes to their lowest levels since 1997. On Monday, the Dow fell below 7,000, and a day later, the S.&P. 500 fell 0.6 percent to dip below 700, taking its 2009 loss to 23 percent.
In afternoon trading, the DJ Euro Stoxx 50 index, a barometer of euro zone blue chips, rose 2.9 percent, while the FTSE 100 index in London increased 2.7 percent. The CAC 40 in Paris was up 2.4 percent and the DAX in Frankfurt 3.3 percent.
Most Asian markets were higher, breaking a three-day losing streak. The Tokyo benchmark Nikkei 225 stock average rose 0.9 percent, while the Hang Seng index in Hong Kong rose 2.5 percent, and the Shanghai Stock Exchange composite index gained 6.1 percent.
The S&P/ASX 200 in Sydney fell 1.6 percent, after a report showed the Australian economy contracted 0.5 percent in the fourth quarter. It was the first such decline in eight years, and came as a surprise to most economists, who had been expecting the country to eke out positive growth in the period.
Investors seemed to shrug off a report by ADP Employer Services that private sector job losses increased in February. Index futures fell slightly after the report, but eventually came back. ADP said private employers cut 697,000 jobs in February compared with a revised 614,000 jobs lost in January. The January job cuts were originally reported at 522,000.
Investors were bracing for another bleak monthly unemployment report to be released on Friday. The national unemployment rate has climbed to 7.6 percent since the recession began in December 2007, and economists expect it to reach 7.9 percent for February.
Market participants were also focused on the interest rate policy meetings Thursday of the European Central Bank and the Bank of England.
The dollar gained against most major currencies. The euro fell to $1.2532 from $1.2562 late Tuesday in New York, while the British pound rose to $1.4105 from $1.4051.
Prices of most government bonds slipped. The yield on the 10-year Treasury, which moves in the opposite direction of the price, ticked up one-tenth of a percent to 2.98 percent. |
