US stocks gain ground after big slide

New York/London: US stocks rose on Tuesday, struggling back from Wall Street's worst slide in more than 20 years, as investors bet that Washington would find a way to pass a plan to stabilise the US financial sector despite Monday's defeat.

The Dow Jones industrial average rose 277.49 points, or 2.68 per cent, to 10,642.94. The Standard & Poor's 500 Index climbed 37.39 points, or 3.38 per cent, to 1,143.78. The Nasdaq Composite Index gained 64.22 points, or 3.24 per cent, to 2,047.95.

Without a sudden surge, the S&P 500 index was headed yesterday for its worst quarter since the third-quarter of 2002 and its worst monthly slide since September of the same year.

European shares fell by midday on Tuesday in volatile trade as investors turned to safe haven drug stocks to offset weakness in the banking sector ahead of a speech by US President George Bush on a rescue package.

By 1125 GMT, the FTSEurofirst 300 index of top European shares was down 0.1 per cent at 1,045.98 in choppy trade after seesawing between 2.7 per cent lower on the day and 0.5 per cent higher.

Markets across Asia tumbled sharply as they opened amid fears that the setback could lead to a broader global financial crisis. But as trading progressed, many indices erased losses and Hong Kong's market staged a dramatic turnaround to close slightly higher as investors scooped up beaten-down shares.

Bargain hunting

Hang Seng index gained 0.76 per cent to close at 18,016.21 on bargain hunting. Japan's benchmark Nikkei stock 225 index slumped 4.12 per cent to close at 11,259.86 - the lowest level since June 9, 2005.

Spot bullion was trading at around $905 last afternoon, but still well shy of its March 17 all-time high of $1,030.80 an ounce.