World Markets Make Mid-Week Gains

By Tom Rivers
London
28 January 2009

Trader Kevin Lodewick, right, works on floor of New York Stock Exchange, 28 Jan 2009

World markets posted moderate gains Wednesday after some U.S. firms reported slightly better than expected fourth-quarter results.

U.S. profit reports from American Express and Texas Instruments and U.S. Steel boosted trader confidence in Asia where share prices rallied Wednesday.

Japan's Nikkei index picked up six-tenths of a percent on the day.

In Europe, banking stocks pushed the markets up with the Lloyds Banking Group leading the advance here in London.

But the overall market sentiment remains extremely cautious.

International Monetary Fund, Washington DC (file photo)

A new report by the International Monetary Fund predicts the world economy will grow by just half-a-percent this year. That is the lowest rate since World War II.

And among the most advanced industrialized nations, Britain is expected to fare the worst with its economy shrinking by 2.8 percent.

In the House of Commons Wednesday, Prime Minister Gordon Brown was forced to defend his recovery plan.

He said his stimulus program is designed to try to keep as many people as possible employed and to keep businesses afloat in these trying times.

Britain's PM Gordon Brown (file photo)

"Helping the unemployed and making sure that small businesses have the finance that they need and that is part of the plan that we are adopting and introducing now that is being adopted in many, many countries of the world to help those who are poor and unemployed," Brown said. "To protect savers by capitalizing the banks, to insure real help to families and businesses now and at the same time to extend lending to small businesses and to home owners, that is the plan that will ensure recovered not just nationally, but when it is adopted internationally." 

According to the IMF, the global economy is expected to see a gradual recovery in 2010.

But this year is going to be difficult.

The International Labor Organization says as many as 51 million jobs worldwide could be lost this year. If that prediction is correct, the global unemployment rate would stand at just over seven percent by the end of the year.