Tuesday, 25 November 2008

Stocks get big boost from Citigroup bailout

Citigroup got its rescue from the US government and stock markets got a spectacular rally.

US stocks surged on Monday, the S&P 500 jumping 6.5 percent to add to Friday's 6.3 percent gain.

UK stocks did even better yesterday, the FTSE 100 surging 9.8 percent, its biggest rise on record.

Other European markets also performed similarly and helped push the Dow Jones STOXX 600 up 8.4 percent.

But while equity investors celebrated, economic data continue to look dismal.

The US housing market continued to deteriorate in October. Bloomberg reports:

Home resales in the U.S. dropped in October and prices fell by the most on record, signaling a deepening housing recession going into 2009.

Purchases of existing homes slid to an annual rate of 4.98 million, lower than forecast, a National Association of Realtors report showed in Washington. The median price fell 11.3 percent from a year earlier, the most since the group began collecting data in 1968.

Meanwhile, Europe's economy is showing no sign of recovery. Eurozone industrial new orders fell 3.9 percent in September while in Germany, the Ifo business climate index declined to 85.8 in November, its lowest level since February 1993, from 90.2 in October.

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