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| US share relief over bank results | |
| (about 4 hours later) | |
| Wall Street shares have risen on relief that results from two major investment banks were not as bad as feared. | |
| Lehman Brothers and Goldman Sachs both reported sharp falls in profits for the first three months of 2008, but the results were better than expected. | |
| In early exchanges, the Dow Jones index was up 196 points or 1.6% at 12,168.4. | |
| In Europe, shares rebounded from Monday's heavy losses with the UK's FTSE 100 up almost 3%. Asian stock markets rallied earlier. | |
| European banks reacted positively, HSBC added 7%, Credit Agricole was also up 7% and in Frankfurt Deutsche Bank shares added more than 5%. | |
| Asian markets were largely higher, Tokyo's Nikkei average closed up 1.5%, Hong Kong's Hang Seng added 1.4% and Mumbai's Sensex was up 2.0%. | Asian markets were largely higher, Tokyo's Nikkei average closed up 1.5%, Hong Kong's Hang Seng added 1.4% and Mumbai's Sensex was up 2.0%. |
| But Shanghai's main index fell almost 4% on worries that Beijing will make further efforts to slow the economy. | But Shanghai's main index fell almost 4% on worries that Beijing will make further efforts to slow the economy. |
| Fed focus | |
| The main focus for investors on Tuesday is the interest rate meeting at the US Federal Reserve. | The main focus for investors on Tuesday is the interest rate meeting at the US Federal Reserve. |
| Investors are expecting the US policy makers to slash interest rates later. | Investors are expecting the US policy makers to slash interest rates later. |
| Some think the benchmark Fed funds rate will be cut by one percentage point, to 2%. | Some think the benchmark Fed funds rate will be cut by one percentage point, to 2%. |
| The Fed is battling to restore confidence in the US banking sector, as well as boosting the economy. | The Fed is battling to restore confidence in the US banking sector, as well as boosting the economy. |
| The emergency sale of Bear Stearns over the weekend rocked the markets. | The emergency sale of Bear Stearns over the weekend rocked the markets. |
| Investors fear the credit crunch is escalating, which will make banks less willing to lend money and hit consumer spending. | Investors fear the credit crunch is escalating, which will make banks less willing to lend money and hit consumer spending. |
| HAVE YOUR SAYCredit is rammed down everyone's throat... Well now it looks as if pay back time is loomingRob, Newcastle upon Tyne, UKSend us your comments | |
| They are now awaiting results from some of the other key US investment banks, with both Goldman Sachs and Lehman Brothers reporting their latest results on Tuesday. | They are now awaiting results from some of the other key US investment banks, with both Goldman Sachs and Lehman Brothers reporting their latest results on Tuesday. |
| Central banks in both the UK and US have moved to ease the crisis. | Central banks in both the UK and US have moved to ease the crisis. |
| The Bank of England injected £5bn to boost lending among banks, while the Fed cut its discount rate - the interest rate at which it lends to commercial banks - from 3.5% to 3.25%. | The Bank of England injected £5bn to boost lending among banks, while the Fed cut its discount rate - the interest rate at which it lends to commercial banks - from 3.5% to 3.25%. |
| And US President George Bush attempted to reassure investors, accepting that the American economy faced "challenging times" but insisting that the Fed was "on top of the situation". | And US President George Bush attempted to reassure investors, accepting that the American economy faced "challenging times" but insisting that the Fed was "on top of the situation". |
| "When need be, we will act decisively, in a way that continues to bring order to the financial markets," he said. "In the long run, our economy is going to be fine." | "When need be, we will act decisively, in a way that continues to bring order to the financial markets," he said. "In the long run, our economy is going to be fine." |
| Do you have any questions on how the world economic situation might affect you? Have you already been hit by tightening credit conditions? Do you own a small business that is struggling to get credit? Send us your questions and experiences using the form below: | Do you have any questions on how the world economic situation might affect you? Have you already been hit by tightening credit conditions? Do you own a small business that is struggling to get credit? Send us your questions and experiences using the form below: |