PROGRESS TOWARDS a US car industry bailout and hopes for massive public works injected life into equity markets yesterday despite distress signals including new corporate job cuts and a pillar of the US media filing for bankruptcy.
Chinese and European leaders plotted their next steps as investors looked to governments to lead major economies out of recession because central banks were running out of room to cut interest rates further.
US president-elect Barack Obama provided some hope with a weekend pledge to create more than 2.5 million new jobs by 2011 and launch the largest investment in US infrastructure since the 1950s.
"Obama looks like he's going to be able to fast-track one of the largest infrastructure spending packages since the history of mankind," said Arthur Hogan, chief market analyst at Jefferies Co in Boston.
Following a meeting with business leaders in London, European Commission president José Manuel Barroso, British prime minister Gordon Brown and French president Nicolas Sarkozy dismissed speculation that Germany - Europe's biggest economy - had reservations about the €200 billion EU stimulus package.
"I was proud to see overwhelming support for the European economic recovery plan presented by the commission," Mr Barroso said after the meeting.
European carmakers focused on consolidation, with Italy's Fiat saying it was too small to survive on its own and Sweden reportedly considering a rescue package for Ford-owned Volvo and General Motors-owned Saab.
Dow Chemical said yesterday it would cut 5,000 jobs, divest businesses and close plants less than a week after US rival DuPont announced its own cutbacks.
The corporate world was also rocked when the Tribune Co - the privately-held publisher of the Chicago Tribune and Los Angeles Times - filed for Chapter 11 bankruptcy protection, exposing unsecured creditors including subsidiaries of JP Morgan Chase and Merrill Lynch.
The Irish market advanced by 144.89 points or 5.8 per cent, to close up at 2,625.95. One of the likely main beneficiaries of the US package is CRH, which added €1.20 to close up at €18.70.
China's leaders gathered to map out economic policy for next year. The "central economic work conference" met in a closed session likely to last three days to discuss ways to keep annual growth at 8 per cent or higher, said a report on the official Xinhua news agency's website. - (Reuters)
