On the up ... traders signal offers in the S&P 500 futures pit at the Chicago Board of Trade / AFP
Wall St rallies after $1 trillion rout
Dow up 490 points or 4.74 per cent
All eyes now on Aussie stocks after $55bn loss
A POWERFUL rally has lifted stocks on Wall Street a day after more than $1 trillion was wiped off the value of US shares, sending shockwaves around the world.
The surge - which could bring a much-needed boost for the battered Australian market this morning - came amid renewed hope for US passage of a financial rescue package.
The Dow Jones Industrial Average had jumped 490.95 points (4.74 per cent) to 10,856.40 just after the closing bell this morning.
It was one of the biggest single-day point gains, a day after the largest one-day point loss for the blue-chip index, 777 points.
The Nasdaq jumped 98.60 points (4.97 per cent) to 2082.33, and the broad-market Standard & Poor`s 500 index rallied 59.71 points (5.40 per cent) to a preliminary closing of 1166.13.
Yesterday, the US market was savaged in the wake of a rejection by the US House of Representatives of a massive $US700 billion ($879 billion) plan to aid the troubled banking sector.
Bush pushes for bailout
US President George W Bush said overnight the rejection of the rescue plan was "not the end".
"The reality is that we are in an urgent situation, and the consequences will grow worse each day if we do not act," he said.
One of the main objections to the plan is the amount of taxpayers money that will be spent to bailout Wall St. Mr Bush said the rescue plan was not that expensive compared to the $US1 trillion Wall St lost on Monday.
"Our country is not facing a choice between government action and the smooth functioning of the free market. We`re facing a choice between action and the real prospect of economic hardship for millions of Americans,`` he warned.
European reaction
European stocks also rallied overnight amid new hopes that US politicians would come to some kind of agreement on a rescue package.
Fallout from the US financial crisis is being felt in Europe. The governments of Belgium, France and Luxembourg pumped €6.4 billion ($11.5 billion) into the struggling bank Dexia yesterday to stop it from failing.
"Take responsibility"
Leaders from around the world told US politicians they owed it to the rest of the world to sort out their financial mess.
"I believe that the Americans have come to realise that they have a responsibility to the rest of the world as well as to themselves," British Prime Minister Gordon Brown told Sky News and BBC television.
Mr Brown`s thoughts were echoed by European Commission spokesman Johannes Laitenberger: "The US must take its responsibilities in this situation, must show statesmanship for the sake of their own companies and for the sake of the world."
Local moves
The Australian stock market took its cue from Wall St`s plunge yesterday, hitting a three-year low, and crashing more than 5 per cent in the opening minutes.
The S&P/ASX200 index closed 206.9 points, or 4.3 per cent, lower at 4600.5, taking investors` losses to $55 billion for the day and more than $500 billion since November`s record high above 6800 points.
Australians` superannuation savings have been crushed by the slump, with experts predicting an average loss of 12 per cent for the year to November.
But the need to stimulate the economy is expected to prompt a 0.5 percentage point cut in official interest rates, even if the squeezed banks are considered unlikely to pass on the full cut to customers.
Bloodbath after bailout blocked AUSTRALIA`S market has been sucked into the vortex of global financial crisis after the Bush bailout plan for Wall St failed.
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