US stocks rally on G20 deal, changes in accounting rules

April 3rd, 2009 - 9:04 am ICT by IANS  

New York, April 3 (DPA) US and global stocks surged Thursday as a summit of the world’s major industrial and emerging powers agreed on a more than $1-trillion aid package to help revive the global economy.
Major stock indices in the US climbed nearly 3 percent and the Euro Stoxx index surged more than 5 percent on the Group of 20 (G20) deal in London.

The G20 leaders after a one-day summit pledged “to do whatever is necessary to restore confidence, growth and jobs” in the global economy and agreed on an overhaul of the financial regulatory system to prevent another financial crisis in future.

The International Monetary Fund’s lending resources were tripled to help developing countries weather the downturn.

US investors were also buoyed by a change in accounting rules that could help relieve the stress on US banks at the centre of the financial turmoil.

The Financial Accounting Standards Board (FASB) voted to relax so-called mark-to-market accounting rules, allowing banks greater discretion to determine the value of their troubled mortgage assets.

Banks have already written off more than $1 trillion in mortgage securities over the last two years, but have long argued that the toxic assets are far healthier than the current market turmoil allows.

The blue-chip Dow Jones Industrial Average gained 152.68 points, or 2.01 percent, to 7,761.6. The broader Standard & Poor’s 500 Index rose 13.21 points, or 1.66 per cent, to 811.08. The technology-heavy Nasdaq Composite Index was up 23.01 points, or 1.51 percent, to 1,551.6.

The US currency dropped against the euro to 74.28 euro cents from 75.57 euro cents on Wednesday. But the dollar rose against the Japanese currency to 99.46 yen from 98.72 yen.

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