Many US investors took a leap of faith back into the US stock market late on Tuesday, buying stocks they see as cheap because they believe the worst is over. The Dow climbed 11% or 889.35 points to 9,065.12, much of it in late trade after it became clear the US Federal Reserve's entry into the market to buy commercial paper had been decisive and apparently successful. US companies yesterday sold a record US$67.1 billion worth of commercial paper with terms of more than 80 days, with the Federal Reserve absorbing about US$60 billion of that. US stocks appeared cheap early in the day with the S&P 500 valued collectively at 10.7 times forecast earnings, the cheapest since 1985, according to Bloomberg. The New Zealand dollar bounced over 56 US cents overnight on easing perceptions about risk globally. Your views? Is the worst over? Are stocks cheap? Or is this a very large dead cat bounce?
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