World Shares Mostly Gain Tuesday 09/27 05:16
World shares were mostly higher on Tuesday as buying kicked in after heavy
selling on Wall Street put the Dow Jones Industrial Average into what's known
as a bear market.
(AP) -- World shares were mostly higher on Tuesday as buying kicked in after
heavy selling on Wall Street put the Dow Jones Industrial Average into what's
known as a bear market.
U.S. futures and oil prices gained.
In early European trading, Germany's DAX climbed 0.7% to 12,315.01 while the
CAC 40 in Paris rose 0.8% to 5,812.41. In London, the FTSE 100 edged 0.1%
higher to 7,029.46.
The future for the S&P 500 jumped 1.3%, while the contract for the Dow
industrials was 1% higher.
In Asian trading, Tokyo's Nikkei 225 index picked up 0.5% to 26,571.87 and
the S&P/ASX 200 added 0.4% to 6,496.20. In Seoul, the Kospi rebounded from
earlier losses, edging 0.1% higher to 2,223.86.
Hong Kong's Hang Seng added just 5 points, to 17,860.31. The Shanghai
Composite index jumped 1.4% to 3,093.86 after China's central bank on Tuesday
moved to maintain cash flow for banks by buying securities from commercial
lenders, with an agreement to sell them back in the future.
The official Xinhua News Agency said the People's Bank of China carried out
175 billion yuan (about $24.7 billion) in reverse repos "to maintain liquidity
in the banking system."
Global stocks have been sagging under concerns over stubbornly hot inflation
and the risk that central banks could trigger recessions as they try to cool
high prices for everything from food to clothing.
Investors have been particularly focusing on the Federal Reserve and its
aggressive interest rate hikes. But volatility in currency markets has further
The British pound dropped to an all-time low against the dollar on Monday
and investors continued to dump British government bonds in displeasure over a
sweeping tax cut plan announced in London last week. It had stabilized by early
The Japanese yen edged toward 145 to the dollar early Tuesday. Last week,
the Bank of Japan intervened in the market as the yen slipped past 145, gaining
a brief reprieve. But the dollar's surge against other currencies is putting
pressure on the BOJ and other central banks, especially in developing economies
facing growing costs for repaying foreign loans.
On Tuesday, the pound was at $1.0809, up from $1.0686 late Monday. The
dollar bought 144.33 yen, down from 144.65 yen, and the euro rose to 96.36
cents from 96.10 cents.
Companies are nearing the close of the third quarter and with the next round
of earnings reports investors will get a better sense of how companies are
dealing with persistent inflation.
Several economic reports are on tap for this week that will give more
details on consumer spending, the jobs market and the broader health of the
The latest consumer confidence report, for September, from the business
group The Conference Board will be released on Tuesday. The government will
release its weekly report on unemployment benefits on Thursday, along with an
updated report on second-quarter gross domestic product.
On Friday, the government will release another report on personal income and
spending that will help provide more details on where and how inflation is
hurting consumer spending.
Seeking to make borrowing more expensive and crimp spending, the Fed raised
its benchmark rate, which affects many consumer and business loans, again last
week. It now sits at a range of 3% to 3.25%. It was near zero at the start of
the year. The Fed also released a forecast suggesting its benchmark rate could
be 4.4% by the year's end, a full point higher than envisioned in June.
The U.S. economy is already slowing, raising worries that rate hikes might
cause a recession. The Dow was the last of the major U.S. stock indexes to fall
into what's known as a bear market on Monday, falling 1.1% to 29,260.81.
The Dow is now 20.5% below its all-time high set on Jan. 4. A drop of 20% or
more from a recent peak is what Wall Street calls a bear market.
The S&P 500 fell 1% to 3,655.04. The Nasdaq dropped 0.6% to 10,802.92, while
the Russell 2000 dropped 1.4% to close at 1,655.88.
In other trading on Tuesday, U.S. benchmark crude added $1.26 to $77.97 per
barrel in electronic trading on the New York Mercantile Exchange. It sank $2.03
to $76.71 on Monday.
Brent crude, used for pricing international oils, rose $1.35 to $84.21 per