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World Markets Soar Monday


World markets have risen sharply amid aggressive multi-national efforts to unfreeze credit and reverse a global financial crisis. VOA's Michael Bowman reports, the gains have extended to Wall Street, where the Dow Jones Industrial Average was up by 936 points on Monday.

After plunging between 15 and 25 percent last week, markets across the globe roared back to life. Major European markets closed with eight to 12 percent gains, while Hong Kong finished up nearly 10 percent. Emerging markets were also higher from Mexico to Malaysia.

With stocks much cheaper than they were just a few weeks ago, investors are sensing an opportunity for future profit, according to the chief investment strategist at U.S.-based Standard and Poor's, Sam Stovall.

"Now, when everybody is telling you how bad they feel [about the markets], chances are, we are at a bottom, and it is time to buy," said Sam Stovall.

The markets appear buoyed by a 15-nation European initiative to rescue failing banks, guarantee bank loans, and take other steps to encourage lending. The plan, unveiled late Sunday at an emergency summit in Paris, is expected to cost between $1 trillion and $2 trillion, and has been hailed by officials at the International Monetary Fund and other institutions.

After weeks of turmoil, the international community is working in unison to unfreeze credit markets, according to Britain's Chancellor of the Exchequer, Alistair Darling.

"If we act together, if we act decisively, if we act quickly, then there is every reason to believe that we can get through this difficult period," said Alistair Darling.

The United States enacted a massive financial rescue package of its own earlier this month that allows the federal government to buy bad debt from troubled financial institutions. The man overseeing the plan, Assistant Treasury Secretary Neel Kashkari, says implementation is proceeding quickly.

"The law empowers Treasury to design and deploy numerous tools to attack the root cause of the current turmoil: the capital hole created by illiquid, troubled assets [bad mortgage debt]," said Neel Kashkari. "Addressing this problem should enable our banks to begin lending again. Our nation has successfully worked through every economic challenge we have faced. And we are confident that this new program will help us overcome these challenges, as well."

Standing alongside Italy's prime minister at the White House, President Bush hailed coordinated multi-national efforts to stem the financial crisis.

Meanwhile, on the U.S. campaign trail, Republican presidential candidate John McCain and his Democratic rival, Barack Obama, both spoke of the need to help American families hit hard by a U.S. economy that was slowing even before the financial crisis struck. On Capitol Hill, Democratic leaders said they hope to craft another government package to stimulate the economy.

A wave of U.S. home foreclosures after a prolonged period of lax lending standards is widely blamed for sparking the financial turmoil. Economists fear the global economy could grind to a halt if banks remain unable or unwilling to lend money to businesses and individuals.

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