Stocks hit highest levels this year

Reassured by second quarter results and by a series of encouraging
indicators, the world markets have rebounded significantly since the start
of the summer, and climbed to their highest levels this year. This week,
Wall Street's Standard & Poor's 500 broad-market index surged above 1,000 on
Thursday and the Paris CAC 40 on Friday rallied 1.24 per cent to 3,521.14
points — both highs not seen since last November. In Tokyo, shares on
Thursday reached a 10- month high with the benchmark Nikkei-225 index rising
135.56 points to 10,388.09, the best finish since October 6. The previous
week, it was London's and Frankfurt's turn with the FTSE 100 index of
leading shares and the Dax which reaching 4,600 and 5,300 points
respectively. Meanwhile, oil prices rose on Thursday to 76 dollars a
barrel in London, the highest level this year. The markets had returned
to levels last seen in October and November after the collapse in September
of the American bank Lehman Brothers, considered the epicentre of the
financial crisis, according to analysts. After the bank's failure, there
were fears for the future of the entire capitalist system, they said. But
the stock market rebound showed that the system 'is not going to collapse,'
said Francois Duhen of CM-CIC Securities. Second quarter results,
including those of the American banks, prompted the rebound, with results
from JPMorgan Chase to mid-July providing a kickstart. 'Businesses
showed that they can restructure themselves and improve their margins
quickly,' said Christian Parisot, shares strategist at brokers Aurel.
Economic indicators showed that in the United States property prices had
stopped falling and that industrial production had started to pick up, said
Frederic Buzare, of Dexia Asset Management. If the worst of the crisis
appears to have passed, it is still difficult to talk of a recovery while so
many uncertainties remain. A recovery would require the type of growth
not yet borne out by the statistics, said Parisot. 'There are
encouraging signs, but there is still the question of consumption' and just
beneath the surface of employment, he said. On Friday, monthly US
employment statistics reassured the markets, with an unexpected drop in the
number of people out of work.