New York (dpa) - Homebuilders and financial companies led US stocks higher Thursday after President George W Bush announced a plan aimed at reversing a tide of defaults on subprime home mortgages.
Countrywide Financial Corp, the largest US mortgage lender, surged 19 per cent for the day's biggest gain in the benchmark Standard & Poor's 500 Index. Fannie Mae, the biggest source of financing for US home loans, rose 7 per cent.
A deal the Bush administration brokered among financial lenders and investors in securities linked to subprime mortgages includes a possible five-year freeze in the interest rate paid by struggling homeowners on their loans.
Countrywide, Fannie Mae and other financial firms have been hard- hit by the subprime meltdown, which has caused billions of dollars in losses and turmoil in financial markets.
The S&P 500 rose 22.33 points, or 1.5 per cent, to 1,507.34. The blue-chip Dow Jones Industrial Average added 174.93, or 1.3 per cent, to 13,619.89. The technology-heavy Nasdaq Composite Index gained 42.67, or 1.6 per cent, to 2,709.03.
The US dollar slipped to 68.37 euro cents in New York from 68.42 on Wednesday. The dollar rose to 111.27 Japanese yen from 110.88.
Gold rose 3.40 dollars to 807.10 dollars per fine ounce.
<---------- Finally he has decided to do something about it
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