Monday 3rd November 2008
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The rally in the final week of October still left the Standard & Poor's 500 Index posting its worst month since the 1987 stock market crash. The S&P 500 rose 1.5% to 968.75 and the Dow Jones Industrial Average gained 1.6% to 9325.01 on Friday. The Nasdaq Composite advanced 1.3% to 1720.95.
JPMorgan gained 9.7% to US$41.25, Bank of America rose 6.1% to US$24.17 and American Express rose 5.5% to US$27.50. Citigroup advanced 4% to US$13.65. General Motors led decliners on the Dow, falling 4.8% to US$5.78.
Stocks also gained in Europe, with Germany's DAX 30 rising 2.4% to 4987.970 and the UK's FTSE 100 gaining 2% to 4377.34.
The US dollar and the yen gained against the euro on Friday, ending for the biggest monthly gains since the inception of Europe's common currency.
The ICE Futures' dollar index, a gauge of the dollar's value against six other major currencies, rose 1.1% to 85.757. The euro fell to 127.31 and declined almost 10% against the dollar last month. The euro dropped 1.4% against the yen to 125.34 yen.
India's central bank on Saturday became the latest to reduce interest rates, making the second cut in two weeks.
The Reserve Bank of India lowered its repurchase rate 50 basis points to 7.5% and also trimmed the amount of deposits lenders must hold in reserve to 5.5% from 6.5%. India's move came after the Bank of Japan slashed its overnight lending rate by 20 basis points to 0.3% and followed reductions from the Federal Reserve, Hong Kong and Norway.
Speculation now centres on further reductions by the European Central Bank and the Reserve Bank of Australia.
Germany is planning a two-year, 50 billion euro financial package to revive the nation's slowing economy, Bloomberg reported, citing a government paper.
To be sure, US government figures showed little sign of a lift in economic activity. US consumer spending tumbled. The Institute for Supply Management-Chicago said its business index fell to a lower-than-expected 37.8. A purchasing managers' survey fell 0.3%.
In South America, Standard & Poor's cut Argentina's credit rating for the second time in three months on mounting fears the country will default on its payment obligations. Argentina's rating was reduced to B-.
The peso dropped 7.5% last month, the biggest slide since the nation abandoned its currency peg in early 2002 after defaulting on debt payments.
Crude oil staged a late gain in New York trading on Friday. Crude for December delivery rose 2.8% to US$67.81 a barrel on the New York Mercantile Exchange.
Copper prices fell, rounding out a record monthly decline amid speculation waning global economic growth will sap demand for the metal.
Copper futures for December delivery fell 3.3% to US$1.829 a pound in New York on Friday.
In New Zealand, Finance Minister Michael Cullen said the government will extend its guarantee of deposits to wholesale deposits of investment-grade institutions.
The institutions will be charged a fee based on their credit rating on a similar scale to retail deposits.
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