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Asia, Pacific markets mixed

  • Story Highlights
  • NEW: Tokyo's Nikkei reverses early slide to close up 0.69 percent
  • Optimism had faded that Washington would pass a bailout bill for automakers
  • Record low benchmark interest rate in South Korea pushed the KOSPI index up
  • Wall St. rallied Wednesday afternoon on news deal struck on automakers bailout
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(CNN) -- Asian and Pacific markets were mixed Thursday as optimism faded that Washington would pass a bailout bill for Detroit's ailing automakers, although a record low benchmark interest rate in South Korea pushed the KOSPI index sharply higher.

The KOSPI was up more than 8.56 percent in late afternoon trading after the Bank of Korea dropped its benchmark interest rate to 3 percent -- the fourth cut on the interest rate in the last eight weeks.

In Japan, Tokyo's Nikkei index reversed an early slide to close up 0.69 percent. But Australia's All Ordinaries index closed down 1.09 percent, Hong Kong's Hang Seng index was down 0.34 percent Thursday afternoon and the Shanghai composite was off 2.27 percent.

Wall Street rallied Wednesday afternoon on news that congressional Democrats and the White House had struck a deal to provide a $14 billion bailout to the U.S. auto industry. But after the markets closed, Republican senators appeared ready to scuttle the bill, keeping it from the 60-vote majority it would need to pass.

The House passed the bill Wednesday night on a 237-170 vote.

The Dow Jones Industrial Average added 0.8 percent Wednesday. The Standard & Poor's 500 index gained 1.2 percent and the Nasdaq composite also gained 1.2 percent.

Stocks rallied through the early afternoon in response to the auto bailout news, lost steam after the release of the November Treasury and then recharged the advance near the close.

The Treasury budget widened to $164.4 billion last month from $98.2 billion in the previous month, versus forecasts for a $171 billion gap.

The budget deficit now totals $401.6 billion in just the first two months of the fiscal year, October and November. The budget deficit for all of fiscal year 2008 was $455 billion.

Stocks slipped Tuesday as investors pulled back after a big rally in the previous two weeks. Between hitting the most recent bear market lows on November 20 and Monday's close, the S&P 500 rose 21 percent.

The U.S. has been in a recession since December 2007, according to a National Bureau of Economic Research report released last week. A majority of top-level executives think the recession will last at least another year, according to a survey by Duke University released Wednesday.

In economic news Wednesday, October wholesale inventories fell 1.1 percent versus forecasts for a decline of 0.2 percent. Inventories fell a revised 0.4 percent in the previous month.

Yahoo was handing out pink slips Wednesday, with the company following through on an earlier announcement that it will cut 10 percent of the workforce, or 1,400 people. Shares gained nearly 10 percent.

Electronic Arts said it will cut staff as it seeks ways to trim costs. But the electronics gaming company didn't specify the number of cuts it will make. EA also cut its fiscal 2009 earnings guidance. Shares fell 12 percent.

Australian mining company Rio Tinto plans to cut 14,000 jobs worldwide -- or 12.5 percent of its global workforce -- and cut its capital investment so as to save $1.6 billion a year by 2010. Shares rallied 29 percent.

So far companies have announced more than 50,000 U.S. job cuts in December. Year-to-date, as of November 30, companies have announced 1.9 million in job cuts, according to the Labor Department.

On the upside, Dow stocks Alcoa, Chevron and Exxon Mobil led a broader rally in the metal and mining and oil services sectors.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by over two to one on volume of 1.31 billion shares. On the Nasdaq, advancers topped decliners by almost two to one on volume of 2 billion shares.

Treasury prices slumped, raising the yield on the benchmark 10-year note to 2.72 percent from 2.69 late Tuesday. The 10-year yield dipped below 3 percent last month for the first time since the note was first issued in 1962. Treasury prices and yields move in opposite directions.

Lending rates improved modestly The 3-month Libor rate slipped to 2.1 percent from 2.16 percent Tuesday, according to Bloomberg. The overnight Libor fell to a new record low of 0.12 percent from 0.14 percent Tuesday. Libor is a key bank lending rate.

The dollar gained versus the euro and fell against the yen. U.S. light crude oil for January delivery rose $1.45 to settle at $43.52 a barrel on the New York Mercantile Exchange following a mixed weekly crude inventories report. Oil recently hit four-year lows.

COMEX gold for February delivery jumped $34.60 to $808.80 an ounce.

Gasoline continued its fall to nearly four-year lows, with prices down 1.5 cents to a national average of $1.683 a gallon, according to a survey of credit-card swipes released Wednesday by motorist group AAA. Prices have been sliding for almost three months and have dropped more than $2 a gallon, or 56 percent.

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