New York - US stocks rebounded on Monday after news that Dubai's flagship conglomerate Dubai World will restructure $26bn in debt of some of its companies, easing default fears.
After spending most of the session in the red, the Dow Jones Industrial Average gained 34.92 points (0.34%) to finish at 10 344.84.
The tech-heavy Nasdaq composite rose 6.16 points (0.29%) to 2 144.60 and the broad-market Standard & Poor's 500 advanced 4.14 points (0.38%) to 1 095.63.
"Stocks finished higher, reversing their earlier decline, after Dubai World said it is in 'constructive' talks with banks on restructuring a portion of its debt," Charles Schwab & Co. analysts said in a note to investors.
Dubai World announced it would restructure part of the group, including property arm Nakheel, with total value of the debt carried by the companies subject to the restructuring process at approximately $26bn.
The Dubai government's debt freeze announcement on Wednesday had rocked markets as investors feared a possible default by Dubai and its state-owned businesses, which together owe an estimated $80bn.
Traders returning for the first full session after the Thanksgiving holiday on Thursday took some comfort from a weekend pledge by the United Arab Emirates central bank to provide additional liquidity to local and foreign banks operating in the UAE.
The Dubai developments boosted banks after their hammering Friday. The S&P banking sector index leapt 3.65%.
Retailers were in focus in the kickoff of year-end holiday shopping.
The National Retail Federation reported that shoppers spent $41.2bn over the Thanksgiving holiday weekend, up from $41.0bn a year ago. More consumers shopped, but spending on average fell amid worries about recovery from recession.
Online retailers were hoping "Cyber Monday" discounts would boost sales.
Retailers' slide "stems from reports that indicate soft sales figures this past on Friday, which is often considered to be one of the busiest shopping days of the calendar year," Briefing.com analysts said in a client note.
Recovery in SA
The rand fell slightly against the dollar on Monday on the back of subdued appetite for risky assets while local stocks edged higher.
The Johannesburg Top-40 index rose 0.36 percent to 24 357.77 points, while the broader All-Share index advanced 0.32 percent to 26 894.74 points. The local bourse started trading late on Monday due to technical problems.
"In summary what's lifting us up is probably a relief that maybe the news on Dubai is not as bad as what it seemed. The global markets are handling that better than expected," said Jan Meintjes, a trader at Gryphon Asset Management.
The rand was trading at 7.43 against the dollar at 18:00, 0.3 percent weaker than its previous close of 7.4120.
"The rand's been following international markets tracking the euro and equity markets. It did quite well this morning but it has come back a bit," said David Gracey head of trading at Nedbank.
- AFP and Reuters