Oil prices fall as stocks trade narrowly
August 7th, 2008 | by mantrionline |Stocks pared early losses and traded narrowly mixed Wednesday as a drop in oil prices helped restrain fresh worries about the financial sector.
Investors began the day fearing more industry-wide writedowns of bad home loans after mortgage financier Freddie Mac reported a larger than expected second-quarter loss.
But a reversal in oil prices, continuing a decline that propelled stocks sharply higher on Tuesday, helped calm investors about the forces tugging at the economy.
Freddie Mac, which substantially increased its reserves for souring loans, lost about three times Wall Street’s expectations on a per-share basis.
The company also announced that it expects to cut its third-quarter dividend as it seeks to preserve capital.
The well-being of Freddie Mac and sister company Fannie Mae is a big concern on Wall Street as the government-chartered companies hold or back nearly half of all US mortgage debt.
The Dow rose 40.3, or 0.35 per cent, to 11,656.07.
The Standard & Poor’s 500 index added 4.31, or 0.34 per cent, to 1,289.19, and the NASDAQ rose 28.54, or 1.21 per cent, to 2,378.37.
LONDON - Europe’s major bourses extended their rally, posting fresh gains thanks to positive trading in banking and mining shares.
In London, the FTSE 100 index climbed 31.6, or 0.58 per cent, to close at 5,486.10.
FRANKFURT - The Dax added 42.69, or 0.65 per cent, to 6,561.39.
PARIS - The CAC 40 rose 61.98, or 1.41 per cent, to 4,448.33.
TOKYO - Japan-based shares staged a powerful rally on Wednesday, snapping a three-day downturn as investors cheered a drop in crude prices, gains on Wall Street and a weaker yen.
Tokyo’s Nikkei 225 index rose 340.23 points, or 2.63 per cent, to end at 13,254.89.
HONG KONG - Hong Kong’s stock exchange was closed Wednesday due to a severe tropical storm sweeping the region.
On Tuesday, the blue-chip Hang Seng Index retreated 565.17 points, or 2.5 per cent, to 21,949.75.
WELLINGTON - The New Zealand sharemarket rose strongly as markets around the world posted healthy gains.
New Zealand’s NZSX 50 closed up 56.66 points, or 1.72 per cent, to 3,352.34.
