Wall Street rises on China hopeSeptember 13th, 2011 - 6:04 am ICT by IANS
New York, Sep 13 (IANS) The US stocks rose in the last hour Monday as investors were smoothed by Italy’s turning to China for help, Xinhua reported.
The market opened lower Monday as German Economy Minister Philip Roesler said “orderly default” by Greece can’t be ruled out.
Investors were worried that Germany might be getting ready to give up on Greece and the lack of a solution to Greece’s debt problem heightened concerns about the debt crisis.
Greece’s chance of default rose as larger-than-expected economic shrink this year might hurt the country’s competence to meet its austerity plan which was required by international rescuers, including European Union and International Monetary Fund.
Also adding on the fear, investors feared a possible credit rating downgrade of French banks.
However, the stocks turned positive in the last hour as Italy’s center-right government was turning to China in the hope that China might help rescue the crisis by purchasing Italian bonds.
The possibility of China’s purchase was critical because in this moment Italian bond yield soared sky-high and strongly hit market’s sentiments.
As for shares, financial sectors rallied Monday. But financial shares suffered a lot recently.
“Not surprisingly, by far the worst performing and most volatile European sector is financials — the region’s largest at 18.8 percent of its market cap,” said Alec Young, international equity Strategist of S&P; Equity Research.
“The sector’s size is magnifying the pain of its stunning decline on the broader European equity asset class,” he said.
The fear hammered both European and US stock markets, and raised risk-aversion appetite as investors rushed to seek refuge. The dollar rose 0.23 percent to 77.36 Monday.
The Dow Jones industrial average rose 68.99 points, or 0.63 percent, to 11061.12. The Standard & Poor’ s 500 was up 8.04 points, or 0.70 percent, to 1,162.27. The Nasdaq Composite Index gained 27.10 points, or 1.10 percent, to 2,495.09.
As for oil, light, sweet crude for October delivery climbed 95 cents, or 1.09 percent to settle at $88.19 a barrel on the New York Mercantile Exchange, after trading from $85.00 to $88.95 a barrel.
But in London, Brent crude for October delivery fell 52 cents, or 0.46 percent to close at $112.25 a barrel.
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