US shares rise in early trading

US shares have opened strongly after President George W Bush renewed calls for Congress to back the $700bn (£380bn) banking rescue plan.

Although Wall Street saw record falls on Monday after Congress blocked the deal, the main Dow Jones index rose 206 points or 2% in early trade on Tuesday.

Analysts said investors are hopeful a new deal can be agreed this week.

Mr Bush warned that if agreement is not reached, the US economy faces "painful and lasting damage".

'Urgent situation'

"We are in an urgent situation and the consequences will grow worse each day if we do not act," Mr Bush said at the White House.
It matters little what path a bill takes to become law. What matters is that we get a law.

"We're at a critical moment in our economy."

While the Dow Jones was up 206 points or 2% to 10,571 in early trading, the other main Wall Street index - the Nasdaq - had advanced 2.5%.

Despite their strong gains, European shares remained mixed in afternoon trading.

While the UK's FTSE 100 was up 23 points or 0.5% to 4,842, Germany's Dax was down 60 points or 1% to 5,748.

Meanwhile, Japan's Nikkei index ended Tuesday down 4.1%, while Hong Kong's Hang Seng rose 0.8%.

Analyst Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said European investors were hopeful the US would eventually pass the bail-out plan.

"This deal is not dead in the water and there are hopes that when Congress reconvenes it could still go through," he said.

There were a number of other key financial events on Tuesday:

In Russia, trading was temporarily suspended on the country's two main stock markets
In the Republic of Ireland, the government announced that all bank deposits would be guaranteed for the next two years
European bank Dexia has received a state bail-out, costing the Belgian, French and Luxembourg governments a combined 6.4bn euros ($9.2bn; £5bn)
Banking stocks leading the falls on the FTSE 100, with HBOS down 10%, and Royal Bank of Scotland losing 5%
Day of turmoil

The US rescue plan, a result of tense talks over several days between the government and lawmakers, was rejected by 228 to 205 votes in the House of Representatives.