US stocks rally on financial moves for bond insurers

Business Materials 26 February 2008 03:18 (UTC +04:00)

( dpa ) - US stocks staged their biggest rally in February on Monday after Standard & Poor's kept top AAA debt ratings for the nation's largest bond insurers.

The move eased worries about the US credit crisis.

MBIA Inc and Ambac Financial Group Inc, which rely on their top credit scores to guarantee 1.2 trillion dollars in bonds, led gains in the S& P 500 Index and helped banks and insurers rebound from earlier losses, Bloomberg financial news service reported.

Banks have been forced to declare billions of dollars in write- downs related to a credit crisis that has seen an unprecedented number of home foreclosures in the United States since the summer.

The blue-chip Dow Jones Industrial Average climbed 189.20 points or 1.53 per cent, to 12,570.22 points. The broader Standard & Poor's 500 rose 18.69 points, or 1.38 per cent, to 1,371.80. The technology- heavy Nasdaq Composite Index increased 24.13 points, or 1.05 per cent, to 2,327.48.

The US currency stayed stable against the euro at 67.43 euro cents, and rose against the Japanese currency to 108.02 yen from 107.13 yen on Friday.

Gold fell 7.3 dollars to 940.5 dollars per fine ounce after the United States signalled it would support a plan by the International Monetary Fund to sell off more than 10 per cent of its gold reserves to shore up dwindling revenues.