US stocks up as gold surges
US stocks rallied Thursday as gold reached 1,000 dollars per ounce and analysts predicted that writedowns related to subprime loans were nearing an end. ( dpa )
Financial shares were helped by a Standard & Poor's prediction that banks had nearly finished their writedowns on securities tied to the loans to borrowers with poor credit that have helped push up defaults and hurt the US economy, Bloomberg financial news reported.
Earlier, US Treasury Secretary Henry Paulson had laid out details of a government plan to place further regulations on the mortgage industry to crackdown on suspect lending practices.
But a majority of economists surveyed by The Wall Street Journal said Thursday the US economy has already fallen into a recession.
"The evidence is now beyond a reasonable doubt," Scott Anderson of the bank Wells Fargo told the newspaper. Anderson was among the 71 per cent of 55 economists asked to assess the state of the economy who agreed it is already in recession.
Mining shares were pushed up by the surging gold price and energy were boosted by record oil prices.
The blue-chip Dow Jones Industrial Average rose 35.50 points, or 0.29 per cent, to 12,145.74. The broader Standard & Poor's 500 Index climbed 6.71 points, or 0.51 per cent, to 1,308.77. The high-tech Nasdaq composite index was up 19.74 points, or 0.88 per cent, to 2,263.61.
The US currency reached a new record low against the euro of 63.99 euro cents from 64.29 euro cents on Wednesday, and against the Japanese currency to 100.44 yen from 101.53 yen.