Stocks rallied around the world on Thursday on optimism that interest rate cuts by the US Federal Reserve and other central banks will ease a looming global recession, even as oil prices fell on concerns about slowing demand. Stocks surged in Asia after rate cuts by the Federal Reserve on Wednesday and by Taiwan and Hong Kong on Thursday. The Federal Reserve also opened four more dollar swap lines to other countries. Japan and Germany also said they would plough billions of dollars into their economies to help cushion them against any deep recession, while the International Monetary Fund also launched a short-term financing facility for developing countries that have a good economic track record but have seen credit markets dry up. The monetary policy moves bolstered risk appetite as the price of safe-haven government debt and gold fell, while the US dollar rallied against the euro and the yen, buoyed by demand from US corporations and global fund managers seeking to square their books or rebalance their portfolios by month-end. MSCI's benchmark world stocks index gained gained 3.69 percent, while its emerging markets equities index rallied nearly 11 percent. The Dow Jones industrial average closed up 19164 points, or 2.13 percent, at 9,182.60. The Standard & Poor's 500 Index was up 23.80 points, or 2.56 percent, at 953.89. The Nasdaq Composite Index was up 41.31 points, or 2.49 percent, at 1,698.52. European stocks ended slightly higher after a choppy session, with banks leading the way. The pan-European FTSEurofirst 300 index rose 0.7 percent for a third straight day to end at 903.61 points. Deutsche Bank gained 17.7 percent after it avoided a third-quarter loss thanks to new accounting rules. But the bank unveiled heavy losses in proprietary trading as global financial markets remained rocky. US Treasury debt prices fell as stocks rose after the news of a smaller-than-expected contraction in third-quarter growth, curbing government debt's safe-haven allure. The benchmark 10-year US Treasury note fell 24/32 in price to yield 3.95 percent, while the 2-year US Treasury note slipped 1/32 to yield 1.56 percent. The US dollar hit session highs against the euro and the yen after trading lower, as investors bought back the greenback to rebalance portfolios for month-end purposes. The dollar see-sawed against a basket of other major currencies, with the US Dollar Index off 0.40 percent at 84.732. The euro shed 0.26 percent at $1.2926, while against the yen, the dollar gained 1.11 percent at 98.49. London's FTSE 100 closed 49.11 points or 1.16 percent higher at 4,291.65 in a choppy session, swinging from a low of 4,200.24 to a high of 4,352.47. The DAX index ended at 4,869.3 points, up 60.61 or 1.26 percent. The CAC-40 index closed 3,407.82 points, up 5.25 or 0.15 percent. The Swiss market index closed at 5,842.34 points, down 38.23 or 0.65 percent. Oil prices tumble US crude settled down $1.54 at $65.96 a barrel, after trading up to $70.60 earlier. London Brent crude settled $1.76 lower at $63.71.
