Asia Stocks Rally On Europe Central Bank Debt Plan

PAN PYLAS

LONDON (AP) ⿿ A bond-buying plan from the European Central Bank continued to support stocks Friday but the dollar slid after worse-than-expected U.S. jobs data lifted expectations that the Federal Reserve will back another monetary stimulus.

Financial markets have reacted positively to the ECB's program, unveiled Thursday by ECB president Mario Draghi, because it lowers the possibility that the euro currency union will break up, at least in the near-term. Stocks have risen strongly, as has the euro and the price of oil, while the costs of borrowing for countries like Spain and Italy has become more manageable.

The centerpiece of the plan ⿿ the ECB's most ambitious response yet to Europe's debt crisis ⿿ is a commitment to buy unlimited amounts of short-term bonds from euro countries that request help. The plan is meant to ease the financial pressures on Spain and Italy, the third- and fourth-largest economies in the eurozone, by giving them time to reduce their debt and reform their economies.

"Yesterday's actions by the ECB .... look like they could well buy Europe some additional time to sort out the problems that have plagued the single currency for the last three years," said Michael Hewson, senior market analyst at CMC Markets.

In Europe, Germany's DAX was up 0.6 percent at 7,214, while the CAC-40 in France rose 0.26 percent to 3,519. The FTSE 100 index of leading British shares was 0.3 percent higher at 5,794.

In the U.S., the Dow Jones industrial average rose 0.03 percent to 13,279 but the broader S&P 500 index rose 0.26 percent to 1,435. On Thursday, the S&P soared to its highest level since January 2008, while the Dow hit its highest mark since December 2007.

U.S. stock markets lost their shine after figures showed the U.S. economy created only 96,000 jobs in August. That was below market expectations for a 130,000. The July increase was also revised down to show a 141,000 gain instead of 163,000.

1 2 Next › Last »