Broad-based S& P 500 soars by 3.6 per cent on banking rally

Business Materials 2 April 2008 03:23 (UTC +04:00)

Winners outnumbered losers nearly 10-to-1 Tuesday on Wall Street amid a broad-based rally led by the battered banking and financial services sectors. ( dpa )

The rally came as two financial services companies, UBS AG and Lehman Brothers Holdings Inc, announced that they would raise a combined 19 billion dollars in fresh capital, sparking optimism about the resolution of the now months-long crisis in credit markets.

Tuesday was the first day of the second quarter, with the session's gains partially erasing steep first-quarter losses on major US stock indices.

"The market's getting a little more comfortable that the crisis is over," Henry Herrmann, president and chief executive of Waddell & Reed Financial Inc, told the Bloomberg financial news agency. "It's a rally associated with the presumed elimination of survival risk."

The blue-chip Dow Jones Industrial Average gained 391.47 points, or 3.19 per cent, to 12,654.36. The broader Standard & Poor's 500 Index rallied 47.48 points, or 3.59 per cent, to 1,370.18. The technology-heavy Nasdaq Composite Index soared 83.65 points, or 3.67 per cent, to 2,362.75.

The US currency rose against the euro to 64.103 euro cents from 63.387 euro cents on on Monday. The dollar leapt against the Japanese currency to 101.95 yen from 99.755 yen on Monday.

Gold plummeted 33.70 dollars to 887.80 dollars per fine ounce.