US stocks closed higher overnight as Dubai World said it was in discussions with banks to restructure US$26 billion in debt and the talks were proceeding on a constructive basis. Global markets strongly rebounded yesterday as investors realised that Dubai's trouble might be a regional problem.
Dow Jones Industrial Average Friday retreated about 1.5 per cent on concerns over the problem of Dubai World. But European shares reversed earlier sharp losses due to some bargain hunting buying.
US market was closed for Thanksgiving Day holiday, but the overseas markets were strongly hit by fears of a debt default by Dubai World, Dubai government's key holding company. Dubai World, which owns strategic global assets, has asked bondholders for a standstill on about US$60 billion in debt until May.
Overnight US stocks ended at a fresh 13-month high ahead of the Thanksgiving holiday, helped by a series of upbeat economic data. A report showed initial claims for US jobless insurance benefits plunged to their lowest levels since September last year. US incomes rose 0.2 per cent and consumer spending jumped 0.7 per cent in October. New home sales rose 6.2 per cent unexpectedly.
US stocks closed weaker overnight after the US Commerce Department lowered its estimates of third quarter GDP and consumer spending. US economic growth in the third quarter was revised down to 2.8 per cent, down from an early estimate of 3.5 per cent expansion. Investors also worried Chinese banking regulator's capital-adequacy requirements would force the nation's lenders to tighten bank lending in China.
US stocks posted a strong gain overnight boosted by better-than-expected home sales. Existing-home sales increased by 10.1 per cent to a 6.1 million annual rate, from 5.54 million in September, the National Association of Realtors said. The US dollar was weaker on Monday on expectations that the interest rate would remain at near zero.
US equities fell for a third straight day on Friday as Dell's disappointing earnings result dragged the US stocks lower. Energy and materials companies were weighed down after European Central Bank president Jean-Claude Trichet indicated that supportive stimulus measures must soon be unwound, prompting traders to buy US dollar.
