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US stocks lifted by bank results | US stocks lifted by bank results |
(19 minutes later) | |
US stocks rose in early Thursday trading after investors' mood was lifted by better than expected results from investment bank Morgan Stanley. | |
Despite Morgan reporting a 42% drop in first-quarter profits, analysts had expected much worse from the bank. | |
In the first hour of trading, Wall Street's main Dow Jones index was up 41 points or 0.3% to 12,431. | In the first hour of trading, Wall Street's main Dow Jones index was up 41 points or 0.3% to 12,431. |
The main UK, German and French share indexes were also slightly up in afternoon trading in Europe. | The main UK, German and French share indexes were also slightly up in afternoon trading in Europe. |
Additional funds | |
Analysts said US investor confidence was further lifted by US Treasury Secretary Henry Paulson's announcement that changes to government-backed mortgage providers Fannie Mae and Freddie Mac would release an additional $200bn (£100bn) for the financing of home loans. | |
US stocks were also helped by Tuesday's latest interest rate cut from the Federal Reserve. | |
The Nasdaq index was up two points or 0.2%. | |
Yet despite the rises, analysts said market turbulence could continue for some time. | Yet despite the rises, analysts said market turbulence could continue for some time. |
Watchdog investigation | |
In London, the FTSE 100 was up nine points or 0.2% to 6,515 by 1405 GMT. | |
The UK stocks news was dominated by sharp losses to banking stocks, led by HBOS. | |
The declines led to the UK market watchdog, the Financial Services Authority, announcing that it was looking into whether rumours had been deliberately spread to undermine bank shares. | |
Officials at the Bank of England denied that any UK banks were in trouble. | |
Concerns about the financial strength of banks were strengthened last week when the fourth-largest corporate lender in the US, Bear Stearns, needed emergency funds before being bought by rival JP Morgan Chase. |