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Bank capital move ignites Wall St


MARKET CLOSE: US shares rebounded and recovered most of the losses from Friday's drop.

Nevil Gibson
Tue, 28 Jun 2011

Stocks on Wall Street soared, led by the financial and technology sectors, as investors found newly agreed-on global capital requirements for banks less onerous than initially feared.

The agreement, hammered out over the weekend in Basel, Switzerland, will force global banks that are considered too-big-to-fail to maintain capital cushions that are significantly thicker than other institutions.

The Dow Jones Industrial Average rose 108.98 points, or 0.9%, to 12,043.56 at the close (8am NZ time). Bank of America, which rose 3.2%, and JP Morgan Chase, up 1.2%, were among the biggest gainers.

The Dow shed 115 points on Friday and finished the week lower, its seventh weekly decline out of the last eight. The blue-chip index is down about 6% since hitting a three-year closing high in late April.

The S&P 500 index rose 0.9% to 1280.10, led by strong gains in financial, technology and consumer discretionary stocks. All 10 of its sectors traded in positive territory.

The technology-heavy Nasdaq Composite rose 1.3% to 2688.28, rebounding from Friday's 1.3% drop.

Other markets: Europe steady, Asia mixed
Investors held back from European stocks, wary of making bold moves ahead of key votes in Greece later this week.

The Stoxx Europe 600 index closed fractionally higher at 264.01. The UK's FTSE 100 added 0.4% at 5722.34, and France's CAC-40 gained 0.3% at 3796.55. But Germany's DAX shed 0.2% at 7107.90.

Japanese shares fell, as exporters such as Toyota Motor and Kyocera were hit by concerns about a weakened euro and Greece's debt problems.

Many Asian markets also fell, with energy stocks slipping on weaker oil prices and banks falling on concern about stricter regulation. Technology shares took their cue from the Nasdaq Composite Index, which shed 1.3% on Friday after Oracle's earnings failed to meet expectations.

The Nikkei Stock Average fell 1% to 9578.31, following Friday's 0.9% rise. In Sydney, the S&P/ASX 200 index fell 1% to 4461.80, while Korea's Kospi fell 1% to 2070.29.

In Hong Kong, the Hang Seng Index shed 0.6% to 22,041.77. But India's Sensex rose 0.9% to 18,412.41, and the Shanghai Composite Index rose 0.4% to 2758.23, the fifth increase in a row.

Commodities: Oil drops, gold steady
Oil prices fell as Greece's debt crisis and the decision to tap global oil reserves continued to weigh on prices.

The light, sweet crude futures contract for August delivery fell $US1.11, or 1.3%, to $US90.05 in New York. Brent crude on the ICE Futures Europe exchange fell $US1, or 0.1%, to $US104.12 a barrel.

Gold futures were flat near the $US1500 an ounce mark as indecisive moves in currency markets and continuing negotiations about a potential bailout for debt-laden Greece left traders little direction.

The most actively traded contract, for August delivery, was down 70USc, or 0.1%, at $US1500.20 in New York. Thinly traded June-delivery gold was down 0.2% at $US1498 an ounce.

Currencies: Euro makes ground
The euro jumped against the US dollar, helped by hopes that the Greek parliament could pass an austerity vote later in the week. The euro was at $US1.4273 compared with $US1.4189 late on Friday.

The euro held slim gains against the Swiss franc and rallied versus the Japanese yen,

The euro traded at ¥115.43 compared to ¥114.10, while it was at 1.1917 Swiss francs after hitting a record low of 1.1808 francs earlier in the global session. The UK pound was at $US1.5967 compared with $US1.5959. The dollar traded at 0.8377 franc from 0.8334 franc.
 

Nevil Gibson
Tue, 28 Jun 2011
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Bank capital move ignites Wall St
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