Equities Rise As Senate Approves Second Part Of The TARP Funds

Asian trade: Equity markets turned from red to green yesterday aided by the Senate’s decision to allow access to the second part of the $700 bailout fund. U.S. markets managed to close slightly into the green, despite earlier dropping close to 3%, while the Asian markets are currently trading higher.

The trading session took off with rumors of banks running out of funds. However, the Senate vote for the $350 billion TARP money shed those rumors away, as banks will receive new cash infusions in the following days. About $100 billion is committed to help homeowners overcome the difficult period, something that both parties agreed upon.

In other news, Goldman Sachs said losses from the U.S. residential mortgage loans might reach $1.1trillion, up from $780 billion. In the same time, losses from commercial real estate, credit car, auto debt and business debt might balloon at $2.1 trillion. Up to now, banks had written off about 1 trillion, the rest of the toxic loans still being on the banks’ balance sheets.

Tonight, the Nikkei rose 101.60 points (1.27%) to 8,124.93. The Australian S&P/Asx gained 19.30 points (0.55%) to 3,548.80.

Crude oil is trading near the lowest value touched in a while. Crude oil for February delivery fell $0.10 to $35.60.

Gold posted strong gains, as the dollar declined. Bullion for immediate delivery rose $12.30 to $819.60.

Previous Wall Street trade: At the close of floor trading on the NYSE, the DOW was on 8212.49 after gaining 12.35 points (0.15%) while the S&P finished on 843.74, up 1.12 points (-3.35%). The NASDAQ was the big gainer for the day, closing on 1511.84 with a gain of 22.20 points (-3.67%). Bonds were little changed on the day, with the yield on the 2-year note rising 0.7 basis point to 0.717% while yield on the benchmark 10-year note rose 0.1 basis point to 2.203%. The dollar ended mixed after strengthening in morning as stocks declined before reversing course once bargain hunters came in, gaining 0.28% on the euro, 0.89% on the yen and 0.26% against Canada's currency as it fell 0.21% to sterling and 0.61% to Australia's dollar.

Previous European trade: In Europe, the U.K. Ftse fell 59.53 points (-1.42%) to 4,121.11, while the German Dax lost 214.59 points (-4.63%) to 4,422.35.