Wall Street stock futures rose Thursday, after central bank interest-rate cuts prompted rallies in Asia and Europe. Investor sentiment improved after China, Hong Kong and Taiwan followed the U.S. Federal Reserve’s lead and cut rates.

Here at home, the Canadian dollar continued its recovery, opening with a gain of 2.16¢ at US83.79¢ after rising 3.67¢ yesterday on reviving oil prices and the U.S. rate cut.

In addition to cutting interest rates by 50 basis points, the U.S. Fed also opened dollar swap lines worth US$30 billion each with the central banks of Brazil, Mexico, South Korea and Singapore.

Those moves sparked rallies in Asia Thursday, where Hong Kong’s Hang Seng surged 12.8% after the local government matched the Fed rate cuts.

Japan’s Nikkei average gained 10% to 9,029.76

In other economic news, the U.S. economy contracted last summer, beginning a slump that some fear could turn into a deep recession.

Gross domestic product fell a seasonally adjusted 0.3% annual rate July through September, the U.S. Commerce Department said today in the first estimate of third-quarter GDP.

The number marked the weakest GDP figure since a 1.4% decline in third-quarter 2001.

Economists had been looking for an annualized contraction of 0.5% in the third quarter.

In earnings news, Royal Dutch Shell reported a 22% profit rise for the third quarter.

Reports are also due from Exxon Mobil, Motorola, Colgate-Palmolive and Eastman Kodak.

Oil futures rose US$1.10 to US$68.60 a barrel and gold futures rose US$13.60 to US$767.60 an ounce.

In Europe, the FTSE 100 was up 1.7% in London, while the German DAX gained 4.3% and the Paris CAC-40 rose 1.6%.

Toronto stocks managed a second day of strong gains on Wednesday, pulling the benchmark index up more than 300 points led by energy and materials shares.

The S&P/TSX composite index rose 349.93 points, or 3.82% to close at 9,501.56.

The junior S&P/TSX Venture composite index increased 41.38 points, or 5.06%, to end at 858.32.

In New York, most of the gains made throughout the day were wiped out in the last few minutes of trading, after the Federal Reserve announced a cut to the interest rate of half a percentage point.

The Dow Jones industrial average, which was up about 200 points earlier in the day, closed down 74.16 points, or 0.8%, at 8,990.96.

A similar trend for the S&P 500 saw the index grow during the afternoon, then finish the day down 10.42 points, or 1.1%, to end at 930.09.

Although the Nasdaq composite index experienced the same late-day plunge, it managed to buck the trend and finish the day with a slight gain of 7.74 points, or 0.5%, at 1,657.21.

IE