* Global stocks surge in record rally after rout
* Oil jumps from 13-month low; many commodities recover
* Euro soars as European governments approve bank rescues
(Adds details about rally in paragraphs 2, 3, 5, 12)
By Herbert Lash
NEW YORK, Oct 13 (Reuters) - Global stocks surged to
record single-day gains on Monday, bouncing off 5-year lows,
while oil prices rose, after governments in Europe took bold
steps to quell the global financial crisis and avert a deep
recession.
The Dow soared more than 900 points, its largest point
gain ever. All three major U.S. stock indexes jumped more than
11 percent, while a benchmark European index surged a record
10 percent.
The Dow Jones industrial average <> rallied 936.42
points or 11.08 percent, to close at 9,387.61. The Standard &
Poor's 500 Index <.SPX> also scored its largest single-day
point gain ever -- surging 104.13 points, or 11.58 percent, to
1,003.35. The Nasdaq Composite Index <> advanced 194.74
points, or 11.81 percent, at 1,844.25.
Crude oil prices jumped more than 4.0 percent along with
other commodities, and euro-zone government debt prices fell
as the European banking system rescue, designed to shake a
global credit crunch out of a deep freeze, removed a
flight-to-safety bid.
The jump in U.S. equities erased the previous one-day
record of more than 5.73 percent in the benchmark S&P 500 two
days after the Black Monday crash of October 1987. It was the
Dow's best percentage gain since March 15, 1933.
The U.S. Treasury market for government debt was closed
for the Columbus Day holiday.
Britain, Germany, France, Italy and other European
governments pledged hundreds of billions of dollars to
recapitalize ailing banks and boost flagging confidence in the
world's wobbly financial system.
The U.S. Federal Reserve, the European Central Bank, the
Bank of England and the Swiss National Bank also said they
would lend commercial banks as much U.S. dollar liquidity as
they needed at fixed rates to restart interbank lending.
In the United States, Treasury Secretary Henry Paulson
said Washington was developing plans to buy equity in
financial institutions to halt the prolonged market turmoil.
Jack Ablin, chief investment officer at Harris Private
Bank in Chicago, said that with luck, the European measures
will make edgy investors think long-term instead of fret
hour-by-hour.
"Sometime last week it seemed like we faced Armageddon, so
to have a coordinated plan on stabilizing banks is huge
progress," Ablin said. But "it's clearly an oversold bounce."
MSCI's all country world index <.MIWD00000PUS> surged 9.52
percent, its biggest one-day percentage gain in at least two
decades. The index's market value increased by $1.7 trillion.
FINANCIAL STOCKS BIGGEST WINNERS
Battered financial stocks were among the biggest gainers
on both sides of the Atlantic.
Morgan Stanley <MS.N> vaulted 87 percent after Japan's
Mitsubishi UFJ Financial Group <8306.T> said it would go ahead
with its plan to pay $9 billion for a 21 percent stake in the
former investment bank, now a bank holding company.
In Europe, Swiss CS Group <CSGN.VX> rose 28 percent, Dutch
ING Group <ING.AS> climbed 27 percent, Swiss Re <RUKN.VX> rose
21.6 percent and Standard Life <SL.L> advanced 20.5 percent.
Shares of General Motors <GM.N> climbed almost 33 percent
following news that the company -- the largest U.S. automaker
-- had held merger talks with rivals Chrysler LLC and Ford
Motor Co <F.N>. Ford's shares rose 20 percent.
The FTSEurofirst 300 <> index of top European shares
closed 10.1 percent higher at 937.41.
In Britain, shares of banks taking part in the bailout --
notably HBOS <HBOS.L>, Lloyds TSB <LLOY.L> and Royal Bank of
Scotland <RBS.L> -- fall sharply. HBOS fell 27.5 percent,
Lloyds TSB sank 14.5 percent and RBS lost 8.4 percent.
Analysts said Europe's bold steps, which many said
eclipsed weekend pledges by ministers of the Group of Seven
industrial nations to take action and ensure coordination,
should successfully tackle the lending paralysis over time.
"It's enough to get these money markets up and running
again," said David Keeble, head of rates strategy at Calyon in
London. "But it might take a few weeks to get it filtering
through to the coal face, as it were," he said.
Asian stocks jumped more than 7.0 percent, according to
MSCI's index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS>, after tanking more than 20 percent last week
to the lowest since December 2004.
Japanese markets were closed for a holiday.
GOLD SLUMPS
Gold at first rose as the U.S. dollar slipped, but later
fell, as the need for a safe-haven investment dissipated,
while commodities recovered broadly after Friday's rout, with
industrial metals, sugar, grains and coffee all rising.
Spot gold prices <XAU=> fell $14.95 to $832.45 an ounce.
Oil prices rose even as Goldman Sachs, a long-standing
commodity bull, conceded global markets would take a far
bigger toll on energy demand than previously expected and said
crude could slide to $50 a barrel if the financial crisis
deepened.
U.S crude <CLc1> gained $3.49 to settle at $81.19 a
barrel. Worries about the impact of the financial crisis on
energy demand and a flight of investors into safer havens had
sent prices on Friday to the lowest level since September
2007.
London Brent crude <LCOc1> rose $3.37 to settle at $77.46
a barrel.
The euro surged as much as 1.8 percent from a 1-1/2-year
low against the dollar, and the interbank cost of borrowing in
sterling, euros and dollars fell as confidence in money
markets showed signs of returning.
The euro <EUR=> rose 1.29 percent tp $1.3585.
The dollar dipped against a basket of major currencies,
with the U.S. Dollar Index <.DXY> off 0.03 percent at 81.506.
Against the yen, the dollar <JPY=> rose 1.19 percent to
101.84.
(Reporting by Ellis Mnyandu, Steven C. Johnson and Matthew
Robinson in New York; Jamie McGeever, Emelia Sithole-Matarise
and Jan Harvey in London and Peter Starck in Frankfurt;
Writing by Herbert Lash; Editing by Jan Paschal)
