Optimism sees Wall Street surge

Lehman Brothers has moved to beef up its balance sheet.

The investment bank says it has raised $4 billion in a special share offering, which has been significantly over-subscribed.

And Swiss banking heavyweight UBS has made a clean breast of it, disclosing further losses of $19 billion related to the US subprime mortgage market.

That comes on top of their $18 billion write-down announced last year. UBS is also looking to raise additional capital.

On the New York Stock Exchange, the Dow Jones industrial average has closed up 391 points at 12,654.

That was a surge of 3.2 per cent in the value of Wall Street's top 30 companies.

The high-tech Nasdaq composite index has jumped 84 points to 2,363.

In Europe, prices on the key exchanges in Germany, France and Britain are up about 3 per cent.

London's FT-100 index has gained 151 points to 5,853.

Local markets

Yesterday in Australia, the market again made marginal headway.

The All Ordinaries index rose just five points to close at 5,415.

The Reserve Bank decision to leave interest rates on hold had been widely anticipated.

But the Commonwealth Bank was the only one of the majors to see its shares advance.

It added 28 cents to $42.09.

The major miners attracted buying support, with BHP Billiton up 84 cents to $36.65.

And the retail sector was mostly weaker, with Wesfarmers down 80 cents to $39.19.

In the overnight session on the Sydney Futures Exchange, the Share Price Index 200 contract closed up 176 points at 5,585.

The 10-year bond contract was down 8.5 points at 93.88 with the implied yield rising to 6.12 per cent.

On foreign exchange markets, the Australian dollar has dropped back again overnight.

About 6:45am AEDT it was was being quoted at 90.66 US cents, down one-third of a cent on yesterday's local close.

On the cross-rates, it was at 0.5813 euros, 92.45 Japanese yen, 45.88 pence Sterling and against the New Zealand dollar it was at 1.154.

The gold price dropped overnight to be quoted at $US885.50 an ounce.

The spot price of West Texas crude oil dropped 62 cents to $US100.92 a barrel.

Source: By Australian Broadcasting Corporation