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US stocks rise on bail-out hopes | |
(about 1 hour later) | |
Leading US shares edged up in early trade, ahead of key comments from US Treasury Secretary Henry Paulson on the $700bn (£382bn) financial bail-out. | |
The Dow Jones industrial average was up 24.77 points, or 0.22% at 11,040.46. | |
The rise came after share prices in Europe and Asia declined as investors remained uncertain about how the plan would be put into practice. | |
The bail-out was set out in a bid to help banks offload bad debt, and boost markets after huge market volatility. | |
But despite positive reaction to the plan, doubts over how soon the rescue plan could be applied have emerged from both the Democrats and Republicans. | |
London's FTSE 100 fell 2.5%, the Cac 40 in Paris slid 1.9% and Frankfurt's Dax was down 1%. Hong Kong's Hang Seng index ended nearly 4% lower. | London's FTSE 100 fell 2.5%, the Cac 40 in Paris slid 1.9% and Frankfurt's Dax was down 1%. Hong Kong's Hang Seng index ended nearly 4% lower. |
Banks were among the main fallers with Deutsche Bank shares falling 3.5%, Royal Bank of Scotland 3.1% lower and Swiss firm UBS down 2%. | Banks were among the main fallers with Deutsche Bank shares falling 3.5%, Royal Bank of Scotland 3.1% lower and Swiss firm UBS down 2%. |
Markets are also waiting to hear comments from Federal Reserve head Ben Bernanke before the Senate Banking Committee. | |
Until Lehman brothers collapsed, Japanese financial institutions were pretty confident BBC's Chris Hogg in Tokyo Global reaction to financial turmoil | Until Lehman brothers collapsed, Japanese financial institutions were pretty confident BBC's Chris Hogg in Tokyo Global reaction to financial turmoil |
The White House says Congress must back the rescue plan to stop wider economic harm. | The White House says Congress must back the rescue plan to stop wider economic harm. |
The Government of Singapore Investment Corporation (GIC), a sovereign wealth fund that has acquired shares in UBS and Citigroup, expressed concerns over the risks of stalling the rescue plan. | The Government of Singapore Investment Corporation (GIC), a sovereign wealth fund that has acquired shares in UBS and Citigroup, expressed concerns over the risks of stalling the rescue plan. |
Dissent | Dissent |
In the US on Monday, the Dow Jones index closed 372.75 points, or 3.3% lower, at 11,015.6, wiping out the gains made during Friday's rally. | In the US on Monday, the Dow Jones index closed 372.75 points, or 3.3% lower, at 11,015.6, wiping out the gains made during Friday's rally. |
Banking shares were particularly hard hit, as many investors switched to commodities such as oil and gold. Oil recorded its largest one-day gain in history on Monday. | Banking shares were particularly hard hit, as many investors switched to commodities such as oil and gold. Oil recorded its largest one-day gain in history on Monday. |
HAVE YOUR SAYWhy do the world's governments insist on bailing out failing banks with our money?Frustrated, CardiffSend us your comments | HAVE YOUR SAYWhy do the world's governments insist on bailing out failing banks with our money?Frustrated, CardiffSend us your comments |
US lawmakers have been holding talks with the administration on the proposed bail-out. | US lawmakers have been holding talks with the administration on the proposed bail-out. |
The plan allows Treasury Secretary Henry Paulson to set up a fund to buy back much of the bad debt held by US banks and financial institutions. | The plan allows Treasury Secretary Henry Paulson to set up a fund to buy back much of the bad debt held by US banks and financial institutions. |
But with the immediate sense of imminent collapse now passing, dissenting voices are beginning to emerge, says the BBC's Kevin Connolly in Washington. | But with the immediate sense of imminent collapse now passing, dissenting voices are beginning to emerge, says the BBC's Kevin Connolly in Washington. |
Contentious issues include limiting compensation for executives of rescued firms, wider help for US homeowners at risk of losing their homes and demands for oversight. | Contentious issues include limiting compensation for executives of rescued firms, wider help for US homeowners at risk of losing their homes and demands for oversight. |
"The Bush Administration has called on Congress to rubber stamp its bail-out legislation without serious debate or efforts to improve it," said US Senate Majority Leader Harry Reid. "That will not happen," he said. | "The Bush Administration has called on Congress to rubber stamp its bail-out legislation without serious debate or efforts to improve it," said US Senate Majority Leader Harry Reid. "That will not happen," he said. |
Richard Shelby, a senior republican on the Senate Banking Committee, also hit out at the plan. | Richard Shelby, a senior republican on the Senate Banking Committee, also hit out at the plan. |
"It would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted," he said. | "It would be foolish to waste massive sums of taxpayer funds testing an idea that has been hastily crafted," he said. |
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Will the $700bn package stabilise the economy? Are you in the US? How do you think the money should be best spent? | Will the $700bn package stabilise the economy? Are you in the US? How do you think the money should be best spent? |
Send us your comments by completing the form below. | Send us your comments by completing the form below. |
In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below. | In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below. |