China Stimulus Package Spurs Stock Surge

LONDON — Stock markets in Europe and Asia rebounded Wednesday amid mounting hopes that China will soon announce a big stimulus package that could help limit the length and depth of the recession in the industrialized world.

A legislative meeting starts Thursday in China and top of the agenda is what the government can do to lift growth rates, which have fallen in the wake of the global economic downturn. As one of the few major economies still expanding, China is being closely watched amid hopes its demand and trade can help the world weather the most severe global slowdown in decades.

Chinese shares led Wednesday's advance, with Shanghai's index jumping more than 6 percent to close at 2,198.11.

"Obviously, this unusual rally suggests that investors are overly optimistic about what to expect from the legislature. They think the government will do more to boost spending to stimulate the economy," said Peng Yunliang, an analyst with Shanghai Securities in Shanghai.

Elsewhere in Asia, Japan's Nikkei 225 stock average was up 61.24 points, or 0.9 percent, to 7,290.96, while Hong Kong's Hang Seng added 297.27, or 2.5 percent, to 12,331.15. South Korea's Kospi climbed 3.3 percent to 1,059.26.

Markets in Singapore, Taiwan and New Zealand also gained. Australia's index shed 1.6 percent.

In Europe, the FTSE 100 index of leading British shares recovered from six-year lows to rise 66.42 points, or 1.9 percent, to 3,578.51, while Germany's DAX was up 99.38 points, or 2.7 percent, at 3,790.10. The CAC-40 in France was 54.05 points, or 2.1 percent, higher at 2,608.60.

U.S. futures pointed to a higher open for Wall Street on Wednesday. Dow futures rose 119, or 1.8 percent, to 6,788 and the broader Standard & Poor's 500 futures gained 14.3, or 2.1 percent, to 704. After a choppy session, the Dow closed Tuesday at 6,726.02, its lowest close since April 1997, while the S&P closed at 696.33, 52 percent below its peak of October 2007.

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Despite Wednesday's rebound around the world, the markets remain in a jittery mood ahead of Thursday's interest rate decisions from the European Central Bank and the Bank of England and Friday's closely-watched U.S. jobs report for February.

"The mood in equity markets is still bleak but we need to be aware that sentiment-emotion is looking rather extreme, not that fundamentals look in any way supportive," said Neil Mackinnon, chief economist at ECU Group.

Sentiment around the world was ravaged this week with the news that American International Group Inc. posted the biggest quarterly loss in corporate history, and HSBC Holdings PLC slashed its dividend and revealed it needed to raise nearly $18 billion from shareholders. And the warning from Ben Bernanke, the U.S. Federal Reserve chairman, that U.S. banks may need more government cash injections to stay afloat did not help matters either.

Oil prices rose, with benchmark crude for April delivery up $1.62 to $43.27 a barrel on the New York Mercantile Exchange. The contract added $1.50 to settle at $41.65 overnight.

In currencies, the dollar fell rose 1.4 percent to 99.35 yen while the euro fell 0.4 percent to $1.2504.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.

Comments

[DLBSR]

We must restore our manufacturing and producing infrastructure before we can begin to repair our economy. Our economy is based on the service industry and consumerism, both are consumers of wealth, not wealth producers. We must protect the minimal manufacturing base we have remaining and strive to develop more. We must also produce clean and renewable sources of energy, becoming a net exporter of energy as opposed to a ravenous importer of this dwindling resource. We must once again grow all of our agricultural products, and increase our exports. We can manufacture everthing we as a country consume, and most of what the world consumes. The US can once again become the manufacturers and producers of steel, pre-cast concrete forms, plastics and composite fiberglass structures, piping, glass, etc.. We can be bold and begin to EARN OUR WAY OUT OF THIS CRISIS today, or we can be fearful and continue to borrow ourselves into economic ruin.
I believe this is the prescription to cure our economic ills. Our problem is we seem to have nobody interested in filling it with American made medicines.

[rkimball]

it will be china's stimulus that pulls the world out of this recession not the usa.

[davidwayneosedach]

The Chinese are waiting until we run out of money before they seriously think about intevening.

[unite4change]

Our corporate media doesn't believe we're smart enough to know they along with Wall Street is manipulating the stock market. They want us to believe this is President Obama fault.

[Lillopa]

Send bush? the bill all of it Obama's also! Having to clean up Bus h mess economy crises, bank crises, Iraq crises while the real terrorist rested for 8 years---send the bill to Bush and republcians all of it!

[mitsie]

Let's see we pass a stimulus package and the stocks go down, China is getting one and the stocks go up. Isn't this anti-American or something? Investors here should be investing to help improve our economy.

[EinChicago]

This story and the correspondening headline really does illustrate the depths of self-loathing which have infested our side.


The Chinese may make a stimulus package of about $500 billion and the Huff Po throws every possible positive headline and boost it can.

The US and Ob-ama puts up stimulus packages of almost 3 trillion when you add up the TARP, the TALF and the Stimulus and the Huff Po and our resident fringies goes out of their way to find the gloomiest, doomiest ways to talk it down.


Seriously, it's like after 8 years of being beaten by the GOP and the Bush regime, we are trained like Pavlov's dogs to automatically hate anything coming from the US government, even if it is coming from our own side and our new president.


It's like a psychological disease or menatl illness. Memo to the fringies: we won the election. We control all three branches of government at the moment. We need to support our guys, not keep beating them down and undermining them.


This is why the GOP, a party that is morally bankrupt and out of touch with reality keeps winning and roaring back into power. GOPers, whatever their faults, are able to rally behind their side and provide support whereas we seem to be determined to defeat ourselves at every turn.

[Lillopa]

I say send Bush the bill----- for all of it -- Bush his own "poor self interest leadership, lack of, for 8 years.... consummed in Iraq, rebuilting Iraq with our money--while the real terrorist rested for 8 years and banks greed, corruption ,took place under Bush watch! Send Bush the bill, plus Pres Oabma's. Which Obama would not have to be doing right now, cleaning up all this corruption massive economy crises etc etc. And Bus h said he can look in the mirror bull crap? Ran fast out the door--

[DLBSR]

It is a demoralizing dilemma to be sure. The Chinese of course do not have our system of government and are therefore unhindered by the divisivness and polarization affecting Capitol Hill, on both sides of the aisle. The Chinese will put forth their stimulus package and the Chinese people will support it or else. I think we all know how to define "or else" in China.
It is absolutely essential the American people understand we have what I believe is the best system of govenment in the world, but in theory only. Practically, our lesgislative branch is broken, consumed by greed and self-serving agendas that displace the interests of the American people. If we are going to emerge from the current crisis anytime soon, we must demand the legislative branch put aside their bitter, divisive & caustic rhetoric and ideology for the good of the country. Otherwise as a country, we will continue our slow and painful descent into the abyss of history.
I am not pointing fingers at the democrats OR republicans. I am charging BOTH parties with culpability for contributing to the events resulting in the seemingly insurmountable challenges affecting all of us on Main Street. I am also charging both parties for allowing this crisis to deepen and continue for longer than it otherwise should have.

[indi1216]

we should have term limits for house and senate rep...this people are there too long and this leads to corruption.

[dgscol]

The Chinese stimulus package : Tank, cane, or whip.

I found out however, whenever the stimulus is missing the Chinese attempt direct marketing to the US : Large screen TV : $400; MP3 player : $10.

[DFL]

American political corruption from the conservatives are hindering things, they are now the "NO" party, they cant stand to see anything in america work anymore, they think we cant do anything in this country anymore, what next, are they going to want workers from china to come over and fix our roads and build the bridges here?

[judiNJ]

Wall Street is having a tantrum and scaring the pants off of people which drives the market down. This is a world wide crisis that will bump up and down and finally settle down. They are now trying to blame President Obama, of course not giving him any credit for his yesterday's comments that it was a good time to buy stocks for looong term, for the market's upward trend. So, Wall Street, don't blame our
Pres for the bad days if you are not going to give him credit for the good days.

[dgscol]

It is about time that China started whipping the boys again. Thank you HIllary.

[munki]

China did it again...

Where is America today?

Please...

Get GREED + ABUSE abolished.­..

GREED + Fair Play is more like... America but NOT the above...

[Chavez08]

Most Americans don't give a rats-ass about the Stock Market at this point. Working Americans lost almost everything because of Reagan/Sup­ply-Side/P­onzi-schem­e economics.

The old economy was unsustainable and, like Obama said, we're "not surprised" stock values are collapsing since they were based on nothing but lies for the past 30 years. Good job/thriving middle-class is what sustains economies, but don't let the proof in India, China, Brazil, Russia sway you (and the only reason they're having problems now is because they were tied to Reagans' Ponzi-scheme in the West)

These numbers are irrelevant, good paying jobs and (traditional) Capitalist opportunity is what Americans want, not more of the Wallstreet "Pull my finger" game.

[mom2sons]

No one was hollering about "redistribution of wealth" the last 8 years, on the backs of the middle and lower classes. Give me a break! What you stole from the American people, is only being given back, maybe? I hope the whiners lose more money every day. Now they want to blame the middle and lower classes for exactly what. No they weren't hollering then, they were rubbing their fat greedy hands together and saying more, more, more. I don't feel one bit sorry for the people who lost money with Madoff. My mother always told me, you lay down with dogs and you get up with fleas. You live by the sword, you die by the sword!

[MetalCanuck]

What a joke, stimulus creates inflation, this has a temporary boosting effect. As soon as investors figure this out the market falls even faster.

[indi1216]

really...t­hen we should just stop building roads and bridges, create infrastructure that will compete for the future...m­aybe we should just go backward and stop progress and let other countries like China and India take over, as that is what they have been doing for the last 30 years...we just fight wars.