Wall Street Zoars..... as Credit Concerns...ebb

Wall Street soars as credit concerns ebb

NEW YORK (AP) - Wall Street began the fourth quarter with a huge rally Monday, sending the Dow Jones industrial average to a record close. Stocks were buoyed by a growing belief that the worst of the credit crisis has passed.

While the beginning of the new quarter was an incentive for institutional investors to buy, they also seemed to be motivated by a sense that banks and other financial companies generally weathered the recent credit market upheaval. Both Citigroup and Switzerland 's UBS AG issued third-quarter profit warnings, but indicated the current period might see a return to normal earnings levels.

Meanwhile, the market was optimistic that new economic data might nudge the Federal Reserve toward another interest rate cut at its Oct. 30-31 meeting. The Institute for Supply Management said the manufacturing sector grew in September at the slowest pace in six months; the trade group said its index of manufacturing activity registered at 52.0 in September, below forecasts for a reading of at least 52.5.

"People are getting more confident there is going to be an October rate cut," said John C. Forelli, portfolio manager for Independence Investment. "To some degree, it looks like Citi kitchen-sinked the quarter, and that from here going forward will be calmer. That's underpinning the financials."

Enthusiasm about acquisition activity picked up after Nokia unveiled an $8.1 billion offer to buy navigation-software maker Navteq Corp. The deal was seen as a signal that corporations are feeling comfortable in making big moves despite recent market turbulence.

"If they are giving us worst-case scenario, then market participants are feeling that most of the stuff we've worried about since July will remain contained," he said. "That's the celebration the market is putting on right now, and the take away is that the black hole of not knowing finally has some numbers around it."

Financial stocks -- from brokerages to retail banks -- slumped during the third quarter as uncertainty grew about the extent of losses from the credit and subprime mortgage turmoil. Comments from Citi Chief Executive Charles Prince that he expects to "return to a more normal earnings environment" during the fourth quarter put investors more at ease.

Asian Outlook

Singapore shares outlook - Higher on Dow's record close
SINGAPORE (Thomson Financial) - Singapore shares are expected to open higher Tuesday after the Dow Jones Industrial Average closed at a record high overnight as investors believed that the worst of the subprime credit crisis in the US may be over.

There are also hopes that the Federal Reserve will continue to cut rates, along with expectations that Chinese liquidity will support buying in regional markets, as Beijing is expected to approve more funds that can invest in overseas markets under its Qualified Domestic Institutional Investor (QDII) scheme.

"While the performance of the STI this week will likely mirror that of Wall Street and that of major Asian bourses, China plays may continue to grab center stage as there are likely to be further speculations about how much approved Chinese funds may be allowed to be invested overseas under its QDII scheme," CIMB-GK Research said in a note.

News that Beijing approved Jiashi, a fund backed by Deutsche Asset Management, as the first fund under China 's QDII scheme to invest in stocks other than Hong Kong H-shares and red chips, boosted sentiment in the Singapore market, which has more than 100 listed Chinese companies.