Asian markets snapped their 4-day losing streak, posting outsized gains. Hong Kong’s Hang Seng soared 5.7% to 17172, %, and the ASX 200 surged 3.7%, its biggest one-day gain in nearly 3 years. The Nikkei climbed 1.7% to 8522, and the Kospi rallied 2.6%. Resource related stocks led the advance, as commodity prices recovered from the recent drop.
The Bank of England announced a new stimulus package to boost the economy, and the ECB announced efforts to increase liquidity, helping to lift European indexes. The FTSE rallied 3.7%, the CAC40 advanced 3.4%, and the DAX gained 3.2%. Resource stocks rallied 5.1%, and banks rose 3.8%. European officials continued to discuss plans to recapitalize struggling banks, reassuring investors. Trading in struggling bank, Dexia, was halted pending details regarding the sale of its Luxembourg division.
In the US, markets gained for a 3rd day. The Dow gained 183 points to 11123, the Nasdaq rallied 1.9% and the S&P 500 gained 1.8%. Target climbed 4.3%, as upbeat chain-store sales data lifted retailers.
Constellation Brands jumped 9% after beating analyst forecasts and raising its outlook.
Currencies
Following the ECB statement the Euro initially fell, pressured by Trichet’s weak outlook for the Euro-zone, but soon reversed to close up .7% to 1.3438. The Australian Dollar rallied 1.1% to .9758, extending Wednesday’s large move. The Pound closed down .1% at 1.5542, recovering from a drop down to 1.5272. The Canadian Dollar and Swiss Franc both rose .3%, and the Yen inched up .1%.
Economic Outlook
It is reassuring to see the European Central Banks take new efforts to help the economy, but the broader debt woes remain unaddressed, and threaten to undermine the health of the entire banking system.
Weekly unemployment claims came in at 401K, better than the 401K forecast, but higher than last week’s reading of 395K.
Friday’s key report will be non-farm payrolls, the most significant report in the monthly cycle. Analysts are expecting a gain of 55K jobs, compared to last month’s net gain of 0 jobs. The unemployment rate is expected to remain steady at 9.1%.