Thursday 11th December 2008
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Louisiana Republican David Vitter vowed to use "every procedural tool available" to seek amendments and delay the proposal.
General Motors slid 5.1% to US$4.46 and Ford fell 4.6% to US$3.08. Under the proposal, the federal government would appoint a so-called 'car czar' with the power to force GM and Chrysler into bankruptcy if they don't devise a restructuring plan by March 31. The two automakers have said they need at least US$14 billion to survive until then.
Money-market rates declined as investors awaited the outcome of the rescue package, amid speculation it will help thaw credit markets. The London interbank offered rate, or Libor, for three-month loans in dollars fell 6 basis points to 2.1%, the lowest since 2004.
Stocks on Wall Street jumped about on speculation about the automakers' deal and after figures showed Europe may be heading into a deeper recession while China's overseas trade weakened last month. The Dow Jones Industrial Average rose 0.9% to 8764.69 and the Standard & Poor's 500 Index rose 1.1% to 897.85. The Nasdaq Composite gained 0.9% to 1560.64.
Aluminium producer Alco led gainers on the Dow, rising 4.8% to US$10.01. Home Depot rose 2.8% to US$23.80 and McDonald's Corp. advanced 2.1% to US$60.98. Chevron rose 2.3% to US$77.33 and Exxon Mobil gained 1.3% to US$79.19 after the price of crude oil climbed more than 2%.
Crude oil for January delivery rose 2.4% to US$43.09 a barrel on the New York Mercantile Exchange, leading a rally in commodities, on optimism the automakers' rescue will help underpin economic growth and demand for fuel. The Reuters/Jefferies CRB Index of 19 raw materials climbed moren than 3%.
Copper futures for March delivery rose 1.9% to US$1.4705 a pound in New York, trimming their slide this year to about 53%.
Gold had the biggest gain in two weeks as the US dollar fell and commodity prices rose, which may stoke demand for the precious metal. Gold futures for February delivery rose 4.5% to US$808.80 an ounce on the New York Mercantile Exchange.
The dollar and the yen weakened as demand for the currencies as a haven diminished amid increased government efforts to revive economic growth.
The dollar fell to $1.3008 per euro in New York from $1.2927 yesterday. The yen declined to 120.53 per euro from 119.07. The yen weakened to 92.60 against the dollar from 92.13.
Yesterday in Asia, China, the world's fourth-biggest economy, unexpectedly posted the first decline in exports in seven years while imports tumbled last month. The figures helped underline the extent of the global slump.
China's exports fell 2.2% last month while imports fell about 18%, according to government figures. That pushed the monthly trade surplus to a record US$40.09 billion.
Signs of a worsening slump in Europe included dwindling industrial output in Italy and France in October.
French manufacturing fell 3.2%, according to government figures, while Italy's output fell 1.2%. The figures were worse than economists had expected.
The UK government and central bank are now considering plans for a 'quantitative easing,' pumping billions of pounds into the economy after rates cuts that slashed the benchmark rate to the lowest since the 1950s failed to arrest the economic slump.
Stocks were mainly higher in Europe, as a pick-up in prices of raw material helped boost commodity companies. Automakers rose on optimism about the U.S. rescue plan.
The Dow Jones Stoxx 600 Index edged up 0.1% to 205.37 and has slid 44% this year. Rio Tinto soared 20% after announcing plans to slash costs and eliminate 14,000 jobs. BMW gained 2.3%.
Germany's DAX 30 rose 0.5 percent to 4804.88 and France's CAC 40 rose 0.7% to 3320.31. The U.K.'s FTSE 100 fell 0.3% to 4367.28 as 3I Group slipped and Standard Chartered dropped 6%, offsetting the surge in Rio's shares.
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