US stocks closed higher on Friday, led by financial companies including JP Morgan Chase, Bank of America and American Express after the US Senate passed a financial overhaul bill.
The Dow Jones Industrial Average rose 125.38 points (1.25%) to 10,193.39. For the week, the measure fell 4.02%, its largest weekly drop since the week ended May 7, the day after the so-called flash crash. The Dow is now off 2.25% for the year to date.
The dollar's fall Thursday at its fastest pace since the market carnage of late 2008 pushed the currency to a more-than-eight-month low against its US counterpart, spurring talk the central bank may yet step in if the slide continues.
At its lowest, the Aussie was down more than 2.5% against the US dollar and is now down 11% since May 3. During its fall, it touched its lowest level since September 2009 at US$0.8256, down from a recent high in mid-April of US$0.9382. By late in the trading day it was at US$0.8355.
Offshore selling pummelled the Australian share market for a fifth consecutive day Thursday as the Australian dollar plunged on concerns about European debt, China's economic outlook and the proposed resource super profits tax. Geopolitical tensions fuelled selling, after a team of international investigators concluded that a North Korean torpedo sank a South Korean warship on March 26.
The benchmark S&P/ASX 200 index closed down 70.6 points, or 1.6%, at a ninemonth low of 4316.5 in volatile trading.
Worries over the potential impact of the euro zone on the global economy sent US stocks tumbling on Thursday into the first correction of the bull market that began in March 2009. Bank of America, Alcoa and General Electric were among the stocks caught in the market's downdraft.
The Dow Jones Industrial Average fell 376.36 points (3.60%) to 10,068.01, the measure's biggest point drop since Feb. 10, 2009, and largest percentage drop since March 5, 2009. The Dow is now at its lowest point since Feb. 10 of this year, and is in negative territory for the year, down 3.45%.
US stocks fell on Wednesday, led by such industrial companies as Caterpillar, Boeing and 3M as investors worried that the weak euro could hurt the profits of companies that do business in the euro zone. The declines wiped out the Standard & Poor's 500-stock index's gain for the year.
In May, consumer confidence recorded its biggest fall since the 2008 collapse of Lehman Brothers, sending a strong signal that rapid interest rate increases since late 2009 have started to squeeze the economy. But data on wages growth also showed pressures are building steadily in the labour market.
Wages grew in the first quarter of 2010 at their fastest pace since the end of 2008. Still, financial markets are now expecting an extended pause in interest rates with the next hike likely in 2011.
US stocks fell broadly on Tuesday, with American Express, Boeing and Intel among the decliners as jitters intensified over Europe's ability to control a debt crisis. The Dow Jones Industrial Average fell 114.88 points (1.08%) to 10,510.95, its lowest close since May 7.
Australian interest rates are "well placed for the present" according to the RBA, after it tightened policy earlier this month to offset inflationary pressures from a resources boom, according to central bank minutes from its May 4 Policy Meeting. It reiterated that if lenders responded to the rise in interest rates as expected "interest rates faced by most borrowers would then be at around their average levels over the past decade".
US stocks edged up, led by consumer stocks such as Kraft Foods and Procter & Gamble. But continued concerns about the euro zone sent investors away from industrial companies dependent on global growth, including Caterpillar, along with energy and materials stocks.
The value of personal finance arranged in March fell 1.3% after seasonal adjustment from February to $6.87bn, the Australian Bureau of Statistics said. The decline in personal finance comprised a 1.6% fall in revolving credit and a 1.1% fall in fixed lending. Commercial finance rose 1.1% in March in seasonally adjusted terms from February to $28.4bn.
A rise of 18% in revolving credit for commercial finance was accompanied by a fall of 5.5% in fixed-lending commitments. Lease finance increased by 5.8% in March after seasonal adjustment to $388m.