US stocks rally on car bail-out hopeDecember 13th, 2008 - 6:25 am ICT by IANS
New York, Dec 13 (DPA) US stocks ricocheted from minus to plus on Friday, depressed first by fears over the future of the car industry and then buoyed by White House remarks that held out hope.For the week, Wall Street ended on an upbeat note, with gains of 3 to 6.6 percent for the three major indices.
With bankruptcy looming over US carmakers, President George W. Bush Friday was considering changing his mind to find an executive route to an 11th-hour rescue of the industry, his spokeswoman Dana Perino said.
That would be the only salvation path remaining this year after a last-ditch $14-billion legislative effort collapsed Thursday amidst resistance from Republicans. Congress has ended its legislative session for the year.
The White House could take some of the money from the financial industry bail-out package - known as TARP - approved by Congress in October to loan to Detroit’s carmakers to prevent the potential loss of millions of jobs, Perino said.
Bush had resisted that path, saying the 700-billion-dollar TARP programme was reserved only for the rescue of the finance industry and banks. He insisted to the very last that Congress find a way to help the ailing car industry, only to have a Democratic plan to which he had agreed rejected by his own party in the Senate.
The Senate’s rejection pushed down Asian stocks Friday, with the benchmark Nikkei 225 Stock Average closing down 5.56 percent, Hong Kong stocks falling almost 5.5 percent and mainland China’s two stock markets plunging by nearly 4 percent.
European stocks also slid, with a 2.47 percent drop in London’s FTSE 100 and a 2.18 percent fall in Germany’s DAX.
Friday’s rally on Wall Street was led by high technology stocks, with Intel Corporation and Micron Technology Inc gaining more than 5.2 percent after US House of Representatives Speaker Nancy Pelosi indicated likely passage of a stimulus measure in January that would increase computer expenditures, Bloomberg financial news service reported.
The Nasdaq high tech index added 32.84 points, or 2.18 percent, to end at 1,540.72, while the Dow Jones index of blue chips added 64.59 points, or 0.75 percent, to 8,629.68. The broad-based S&P 500 rose 0.7 percent to 879.73 after falling as much as 2.6 percent in the course of Friday.
For the week, the Dow Jones gained 3 percent, the S&P added 4 percent and the Nasdaq climbed 6.6 percent
The US currency fell to 74.752 euro cents from 75.01 euro cents Thursday. It also dropped against the Japanese currency, to to 91.06 from 91.54 yen Thursday.