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Wall Street rebounds as Abu Dhabi to inject $7.5 bln in Citigroup

Major US stock indexes rebounded sharply Tuesday, after the Abu Dhabi announced its plan to invest $7.5 billion in Citigroup Inc.

The purchase make the Gulf Arab state one of the bank’s largest shareholders and relieved to some extent investors’ concern about Citigroup, the nation’s largest bank. Citigroup shares rose 52 cents, or 1.74%, at $30.32. However, the Conference Board issued its reading on November consumer confidence, indicating that the index plummeted in November to the lowest 87.3 in two years from 95.2 in the previous month. Analysts once expected the index to fall to 90.5, as gas prices rose and loans became harder to obtain. Moreover, Golden Sachs, a leading global investment banking and management firm, increased the US economy recession risk to 40-50% on Tuesday and predicted the US unemployment would increase from 4.7% to 5.5%. Therefore, the firm saw more rate cut and GDP growth below trend for extended period.

The Dow Jones rose 215.00, or 1.69%, to 12,958.44. The Standard & Poor’s 500 index increased 20.01, or 1.49%, to 1,428.23, and the Nasdaq composite index rose 39.81, or 1.57%, to 2,580.80. The euro traded at $1.4841 late in New York, less than the $1.4868 it bought Monday. It touched a high of 1.4908 dollars early on Tuesday trading after survey showed increased business confidence in Germany, Europe’s largest economy. (