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World stocks up on European rescue deal for Greece

World stock markets rise after European leaders agree to Greek rescue deal By The Associated Press

BANGKOK (AP) ' World stock markets climbed again Friday, continuing to be buoyed by a European deal aimed at slashing Greece's massive debt and preventing the crisis from engulfing "too big to bailout" countries such as Italy.

Oil prices lingered above $93 per barrel and the dollar gained against the euro but slipped against the yen.

European shares were higher in early trading. Britain's FTSE 100 rose 0.1 percent to 5,720.79. Germany's DAX gained 0.9 percent to 6,394.05 and France's CAC-40 added 0.6 percent at 3,390.09.

But the euphoria began to wear off on Wall Street, which appeared headed for a lower opening. Dow Jones industrial futures fell 0.4 percent to 12,123 and S&P 500 futures were 0.4 percent lower at 1,278.10.

Asian stocks posted a second day of gains on the European news.

Japan's Nikkei 225 index jumped 1.4 percent to close at 9,050.47, its highest close since Sept. 1. Hong Kong's Hang Seng gained 1.7 percent to 20,01924 and South Korea's Kospi rose 0.4 percent to 1,929.48.

Australia's S&P/ASX 200 gained 0.1 percent to 4,353.30 and the Shanghai Composite Index added 1.6 percent to 2,473.41. Benchmarks in Singapore, Taiwan, Indonesia and Thailand were also higher.

After two years of unsuccessful attempts to address the continent's debt problems, European leaders unveiled a deal Thursday aimed at preventing the Greek government's inability to pay its debt from escalating into another financial crisis like the one that followed the collapse of Lehman Brothers in 2008.

Banks are being asked to take 50 percent losses on the Greek bonds they hold. Europe will also strengthen a financial rescue fund to protect the region's banks that will also be used to insure some potential losses on the debt of weak eurozone economies like Italy, which is considered too big to bail out.

But some analysts cautioned that Europe was still at risk, since mapping out the rescue plan was simple, compared to the complex and costly task of implementing it.

"I think there is euphoria of Europe finally solving its problems. But the question is, how do you finance the financial stability fund? Who is supposed to pay for it? That is left blank," said Francis Lun, a Hong Kong-based analyst.

"For the moment, Greece will not go under. That is all we know. But the commercial banks will take a big hit," Lun said. "That will really kill them."

But renewed confidence in Europe helped fuel a surge on Wall Street that also boosted stocks in Asia, as did signs of stronger U.S. economic growth and corporate earnings.

Japanese steel makers Nippon Steel Corp. rose 3.4 percent and Kobe Steel Ltd. gained 4.7 percent. Heavy equipment maker Komatsu Ltd. jumped 5.6 percent.

South Korean industrial shares also rose. Steel giant POSCO gained 1.6 percent while Hyundai Heavy Industries, the country's leading shipbuilder, gained 0.7 percent.

Chinese property shares continued to climb on speculation that China might relax its inflation-fighting measures that have drained liquidity out of the financial markets. Hong Kong-listed Poly Real Estate Group added 4.4 percent and China Vanke Co. Ltd. jumped 7.3 percent.

The U.S. government reported that the American economy grew at a 2.5 percent annual rate from July through September on stronger consumer spending and business investment. That was nearly double the 1.3 percent growth in the previous quarter.

The Dow Jones industrial average soared 2.9 percent to 12,208.55 ' its largest jump since Aug. 11. The S&P 500 rose 3.7 percent to 1,284.59. The Nasdaq composite leaped up 3.3 percent to 2,738.63.

Benchmark crude for December delivery was down 79 cents at $93.20 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $3.76, or 4.2 percent, to settle at $93.96 in New York on Thursday.

Brent crude was down 33 cents at $111.75 a barrel on the ICE Futures Exchange in London.

In currencies, the euro softened to $1.4178 from $1.4216 late Thursday in New York. The dollar slipped to 75.82 yen from 75.94 yen. The greenback hit a new record low against the yen the previous day, sinking to 75.63 yen at one point.

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