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    Tuesday, August 9, 2011

    Reuter site - Asia stocks bounce after Fed move stems rout

    This article was sent to you from, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:

    Asia stocks bounce after Fed move stems rout

    Tue, Aug 09 20:48 PM EDT

    By Alex Richardson

    SINGAPORE (Reuters) - Asian stocks rebounded on Wednesday, following a jump in U.S. shares, after the Federal Reserve made an unprecedented pledge to keep interest rates near zero for at least two years, stemming a global equity rout for the time being.

    But investors remained wary about implication of the central bank's move -- that it expects the U.S. economy to remain weak far longer than previously forecast -- supporting demand for safe havens such as gold and the Swiss franc.

    "Volatility is calming down from an extreme level. Clearly there's going to be considerable concerns still, but the market had got seriously carried away and gone to an extreme of fear," said Greg Gibbs, strategist at RBS in Sydney.

    World stock markets had been tumbling since the start of August on fears of a slide back into recession for the United States, reinforced by a downgrade of the U.S. credit rating on Friday, and the ever-expanding euro zone debt crisis.

    MSCI's all-country world stock index <.MIWD00000PUS> remained about 17 percent below its May peak on Wednesday, after slipping as far as 20 percent, the generally accepted definition of a bear market, on Tuesday.

    Tokyo's Nikkei <.N225> rose 1.6 percent and MSCI's broadest index of Asia Pacific shares outside Japan rose about 1.7 percent <.MIAPJ0000PUS>, led by the materials sector, which jumped more than 3 percent <.MIAPJMT00PUS>. <.T>

    Wall Street shares posted their biggest one-day gain in more than two years on Tuesday, when the S&P 500 index <.SPX> leapt 4.7 percent. <.N>

    Against the Swiss franc, the dollar bought around 0.7220 francs, having plunged 6 percent at one stage on Tuesday to a record low around 0.7067.

    The dollar dipped to around 77.00 yen, not far from the all-time trough of 76.15 reached in mid-March.

    The euro also touched a record low against the Swiss franc at around 1.0075, before recovering some ground to 1.0384 francs. But the single currency jumped on the dollar to $1.4350, putting more distance from last week's trough around $1.4054.

    Continued strength in the Swiss franc and yen keeps alive the prospect of further intervention by the Swiss and Japanese authorities, after both took steps to weaken their currencies last week.

    Gold firmed from late New York levels to around $1,755 an ounce, after striking the latest in a string of records around $1,778 on Tuesday.

    U.S. crude oil climbed back above $80 a barrel, rising more than 2 percent to trade around $81.05.

    (Additional reporting by Ian Chua in Sydney; Editing by Ramya Venugopal)


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    Reuter site - Wall Street roars back in wild trade after Fed meet

    This article was sent to you from, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:

    Wall Street roars back in wild trade after Fed meet

    Tue, Aug 09 19:04 PM EDT

    By Rodrigo Campos

    NEW YORK (Reuters) - Stocks rallied on Tuesday in a volatile session as investors struggled to decipher the Fed's signals on the economy after a dizzying two-week slide.

    Buying accelerated into the close and the S&P 500 posted its best day in more than two years, following a drop of nearly 17 percent over the past weeks.

    The market reversed direction six times after a Fed statement that pledged two more years of near-zero interest rates.

    Bank shares roared back from recent losses with the KBW capital markets index up 6.7 percent.

    "The last three or four weeks, the stock market has really discounted a mild recession," said Mohannad Aama, managing director at Beam Capital Management LLC in New York.

    "Now after the Fed announcement, the market has to start factoring in what the response from the Fed and the government will be. There is still a small chance for a fiscal stimulus aimed at job creation. The FOMC statement today was positive for equities."

    The Dow Jones industrial average gained 429.92 points, or 3.98 percent, to end at 11,239.77. The Standard & Poor's 500 Index rose 53.07 points, or 4.74 percent, to 1,172.53. The Nasdaq Composite Index added 124.83 points, or 5.29 percent, to 2,482.52.

    About 16.4 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq -- more than twice the daily average so far this year of 7.75 billion.

    Advancing stocks outnumbered declining ones on the NYSE by a ratio of almost 12 to 1, while on the Nasdaq, almost five stocks rose for every one that fell.

    The three major U.S. stock indexes, though, are still in negative territory for the year, in spite of Tuesday's strong rally.

    At its session low after the Fed statement, the S&P 500 came within a few points of entering a bear market -- or a 20 percent decline from its recent closing high set on April 29.

    According to a Reuters poll, the United States faces one-in-four odds of slipping back into recession, though the economic outlook was seen as raising the likelihood of new Fed action.

    Even some investors hoping for action from the Fed acknowledged the central bank's options appear to be limited because the current crisis is not liquidity-driven, as it was in 2008.

    Equities suffered a massive drop on Monday, the first session since the United States lost its top-tier triple-A credit rating from Standard & Poor's. As a result of Monday's huge sell-off, the S&P 500 posted its worst one-day percentage loss since December 2008.

    (Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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