Stock markets soar on signs of US financial bailout

NEW YORK (AFP) — Stock markets surged globally Thursday on signs a deal was near on the US government's massive bailout plan for ailing financial firms.

On Wall Street, the Dow Jones Industrial Average rallied 196.89 points (1.82 percent) to close at 11,022.06 and the Nasdaq composite jumped 30.89 points (1.43 percent) to 2,186.57.

The Standard & Poor's broad-market index increased 23.31 points (1.97 percent) to 1,209.18.

Investors cheered news that reluctant US lawmakers were getting close to compromise on the Treasury Department's 700-billion-dollar plan to buy toxic mortgage-related assets from financial firms at the heart of the global credit crisis.

US President George W. Bush, in a televised address late Wednesday, appealed to Congress to pass the plan quickly to avert economic collapse.

"My hope is that we can reach an agreement very shortly," the president said Thursday as he met with top lawmakers as well as White House rivals John McCain and Barack Obama in his cabinet room.

"We are in a serious economic crisis in the country, if we don't pass a piece of legislation," said the president.

"We've reached a fundamental agreement on a set of principles," Senator Christopher Dodd told reporters in Congress, after nearly three hours of talks among Democratic and Republican leaders on Treasury Secretary Henry Paulson's rescue package.

Fred Dickson at DA Davidson & Co. said the plan could provide a major boost to the economic and market outlook.

"Quick implementation of the rescue program will probably trigger a significant positive reaction in the stock market," he said.

"However, investors will probably quickly settle down and realize we still have to deal with a very slow growth economy ... We believe this will be a very slow process which may extend for two to three years or more," he said.

In Paris, analysts at brokers Aurel wrote that while upbeat comment from officials and lawmakers in Washington had bolstered sentiment, "uncertainties on details of the Paulson plan remain strong, notably on just how the toxic assets will be bought."

Earlier gains on US markets lifted spirits in Europe, where London's FTSE index rose 1.99 percent to close at 5,197.02.

In Paris, the CAC 40 advanced 2.73 percent to 4,226.81 while in Frankfurt the Dax added 1.99 percent at 6,173.03.

In South America, Brazil's Ibovespa leapt 3.98 percent, Argentina's La Bolsa de Buenos Aires jumped 3.15 percent. In Mexico City La Bolsa de Valores de Mexico climbed 2.81 percent.

Canada's S&P/TSX index inched up 0.26 percent.

Asian markets earlier had closed mostly lower, when the prospects for the bailout plan appeared less positive.

Tokyo closed down 0.90 percent Thursday, Hong Kong slid 0.20 percent, Sydney shed 1.0 percent and Taipei lost 1.17. Seoul managed a gain of 0.38 percent and Bangkok won 0.11 percent.

Chinese shares shot up 3.64 percent, led by securities firms amid hopes that Beijing would introduce margin trading soon, dealers said.

Source: http://afp.google.com/article/ALeqM5idnO1RibSG6fHduGkak7Ayncd8QA