Wall Street bounced back Monday from a week of falling stocks, after North American and European leaders agreed on plans to tackle the worldwide credit crisis. The Dow Jones rose a record-breaking 936 points.
The previous record for a one-day point gain was 499 points during the dot-com boom of 2000.
After the closing bell rang, the Dow Jones industrial average had climbed up 936.42 points to finish at 9,387.61. Last week, it lost nearly 2,400 points over eight sessions.
The NASDAQ was also 194.74 points higher at 1,844.25 and other world markets bounced back, too. Analysts said U.S. stocks were headed for the biggest single-day percentage gain in at least two decades.
Toronto's stock exchange was closed Monday because of the Thanksgiving holiday.
The rebound occurred as American and European leaders intensified their efforts to ease a credit crisis that has shaken global economies over the past month.
On Monday, Hong Kong's Hang Seng Index saw a huge 1,434 point jump after a 7 per cent loss on Friday. Japanese markets were closed on Monday for a public holiday, but Australian and Singapore indices also climbed back more than 5 per cent, and the Chinese and South Korean benchmarks added about 3.7 per cent.
The positive news wasn't limited just to Asia and Australia. Britain's FTSE-100 climbed 5.6 per cent, Germany's DAX was up 6.4 per cent, and France's CAC-40 jumped 7 per cent.
The markets appear to be responding to efforts by European and North American leaders to help their banking sectors, which have suffered a crisis in capital and confidence because of bad mortgages.
On Monday, the U.S. Federal Reserve and four other central banks, including the European Central Bank, unveiled new measures to help open up tight credit markets. The Bank of England, The European Central Bank and the Swiss National Bank, announced they will provide unlimited U.S. dollar funds to financial institutions.
Australia says it will guarantee bank deposits for three years and three of Britain's largest banks said they will take US$63 billion in public money to help their balance sheets.
In a bid to ease the global credit crisis, European countries that share the euro currency jointly decided Sunday to offer temporary refinancing guarantees for banks. But even with government action, a full economic recovery for global economies will take time.
Warren Jestin, chief economist for Scotiabank, told CTV's Canada AM on Monday that the U.S. economy will remain weak for about another year.
"The most important part, though, is what happens after we get this mess behind us, after Main Street begins to recover, Wall Street begins to settle down."
"My suspicion is that we've changed the structure of things in a way that will not support a borrow-to-buy type of environment, so that U.S. growth is going to be slower. I wouldn't be surprised if European growth is slower, too, and in Canada, well we're going to be trending along roughly at the U.S. rate -- 2.5 per cent growth may be as good as we can do."
