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Dollar joins falling US stocks
US stocks, bonds and the dollar fell on Monday as investors questioned the impact the US government's $700 billion bailout for troubled banks would have on the country's economy and already strained budget.
- Reuters
- Published: 23:53 September 22, 2008
New York: US stocks, bonds and the dollar fell on Monday as investors questioned the impact the US government's $700 billion bailout for troubled banks would have on the country's economy and already strained budget.
An hour after opening, the Dow Jones industrial average was off 124.72 points, or 1.10 per cent, at 11,263.72. The Standard & Poor's 500 Index fell 19.02 points, or 1.52 per cent, to 1,236.06. The Nasdaq Composite Index shed 29.57 points, or 1.30 per cent, to 2,244.33.
By late afternoon in Eur-ope, Britain's FTSE 100 lost 0.72 per cent to 5,273.17, Germany's DAX slumped 0.80 per cent to 6,139.93 and France's CAC 40 dropped 1.26 per cent to 4,270.33.
Most Asian markets have extended their gains after the US government proposed a $700 billion plan to rescue banks from billions of dollars in risky mortgage debt.
In Japan, the Nikkei 225 index climbed 1.4 per cent to close at 12,090.59 points yesterday, while Hong Kong's Hang Seng index rose 1.6 per cent to end at 19,632.20. In China, the Shanghai Composite Index soared 7.8 per cent on hopes of a turnaround after government steps to stabilise the economy.
The dollar weakened broadly as sceptical investors tried to sort out the details of the rescue plan, while government debt prices in the euro zone and the US extended losses due to concerns about the how much this would cost Washington. Congress would need to increase the US government's debt limit to $11.3 trillion from $10.6 trillion.
Gold was higher in early New York trade, climbing during the European session as the dollar weakened.
See also Pages 38, 43 &48
Rally continues: Crude climbs to $108
Oil rose more than $3 to $108 a barrel on Monday, continuing a rally sparked by the US rescue plan for its financial sector.
Sweeping government measures to rescue the financial system and restore confidence in shaky markets spurred gains across markets on Friday, when oil rose almost 7 per cent to cap its biggest three-day rally in a decade. US crude for October delivery, which expired on Monday, rose $3.46 to $108.01 a barrel by 1346 GMT.
London Brent crude traded up $3.53 to $103.13. "The key driver continues to be the US rescue package which has changed the sentiment in the oil market," said Bank of Ireland analyst Paul Harris.
- Reuters
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