World markets are sharply higher amid aggressive multinational efforts to unfreeze credit and reverse the global financial crisis. From Washington, VOA's Michael Bowman reports.
U.S. markets opened with triple-digit gains, mirroring rallies in Europe and Asia. Major European markets were up between four and eight percent in afternoon trading, while Hong Kong finished with a gain of just under 10 percent.
"I have my clients calling me and telling me to buy, buy, buy [stocks]," said California-based investment manager Ken Winans.
Last week saw most major world markets lose between 15 and 25 percent. 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 & 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," Stovall said.
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 of European leaders in Paris, is expected to cost between $1 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 concert 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," Darling said.
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]. Addressing this problem should enable our banks to begin lending again," Kashkari said. "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."
A wave of U.S. home foreclosures after a prolonged period of lax lending standards is widely blamed for sparking the financial crisis. Economists fear the global economy could grind to a halt if banks remain unable or unwilling to lend money to businesses and individuals.