| Author |
 Topic  |
|
|
Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 03/11/2008 : 19:11:05
|
Dow Climbs 416.66 for Its Biggest Gain in Over 5 Years
By MICHAEL M. GRYNBAUM
Published: March 11, 2008
Wall Street enjoyed its best trading day in more than five years on Tuesday — complete with a 400-point gain in the Dow Jones industrial average — after the Federal Reserve injected a burst of financial adrenaline into the ailing banking system.
The Dow finished up 416.66 points, near its high for the day, for a one-day gain of 3.6 percent, to 12,156.81, snapping a three-day losing streak. It was the biggest one-day point gain for the Dow since July 29, 2002. The Standard & Poor’s 500-stock index was up 3.7 percent, and the technology-heavy Nasdaq composite index gained 4 percent.
For weeks, investors have been concerned about a freeze-up in the credit markets, as banks cowed by round after round of multibillion-dollar write-offs became increasingly panicky about lending to businesses and consumers.
On Tuesday, the Fed announced it would offer up to $200 billion in ultra-safe Treasury securities to the nation’s banks, including several major brokerage firms, in exchange for a variety of collateral options — including the very mortgage-backed securities that have caused the recent financial crisis.
That means banks will be able to unload some of those soured assets, potentially freeing up money to keep the nation’s economic bloodstream flowing. It was the central banking move that many investors had been waiting for.
“For the first time, the Fed now is doing the relevant work,” said David Kovacs, an investment strategist at Turner Investment Partners in Berywn, Pa. “This is a move by the Fed that has teeth to it.”
Investors had complained that the Fed’s recent round of interest rate cuts — its traditional tool to address problems in the economy — had been largely ineffective in easing troubles in the credit and equity markets.
But moments after the Fed announced its new programs, stocks jumped, with the Dow gaining more than 200 points in the first half-hour of trading. The major indexes fell back slightly during midday but surged again in the afternoon, ending near their highs for the day.
“No doubt there’s a relief,” said James Paulsen, a strategist at Wells Capital Management. “For us bulls that had been getting run over, it’s nice to have a day like this.”
Shares of financial services firms, which have suffered steep losses in recent months, led Tuesday’s revival, with companies like Wachovia and Morgan Stanley recording double-digit percentage gains.
Of the 30 Dow components, American Express led the way, gaining almost 10 percent. Only Boeing declined.
The dollar came back against every major currency, with the euro finishing at $1.5318, down 0.17 percent. Crude oil prices rose to another record, up 85 cents to $108.75 a barrel.
Treasury bonds fell back as bond market investors became concerned that under the new Fed program, the government might issue too much debt. “But,” Mr. Kovacs said, “the majority of market participants see that there could be some improvement in the seizure of the credit market.”
Though the rally can be interpreted as a tentative vote of confidence in the Fed, some analysts cautioned that after several days of losses, the Dow climbed back only to where it was last Thursday.
“It takes us back to where we were three days ago,” Mr. Kovacs said. “We have a long way to go.”
You must be logged in to see this link.
|
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
|
|
Nickelless
Administrator
USA
5580 Posts |
|
|
Gresham
Penny Pincher Member
184 Posts |
Posted - 03/12/2008 : 14:24:18
|
<quote>Crude oil prices rose to another record, up 85 cents to $108.75 a barrel.</quote>
Which by the way are finally reaching inflation adjusted (by cpi) new highs. Which probably means that the cpi under reports inflation after all.
|
 |
|
|
n/a
deleted
192 Posts |
Posted - 03/12/2008 : 22:36:54
|
416.66 points failed to cover the previous three days' losses.
the next day the market was down again.
The magic juju used to last a month, then it only lasted a week, now it last a day.
Next time the bump will get us off for an hour, the next one might last a minute. |
.....................................................................................................................
The market can stay irrational longer than you can stay solvent.
John Maynard Keynes,
English economist (1883 - 1946)
|
|
|
|
fiatboy
Administrator
912 Posts |
Posted - 03/13/2008 : 21:47:37
|
416.66? Puh-leeeaze! Price the Dow in gold, silver, copper, or just about any other currency, and then we can talk about the markets.
One step forward, two steps back.............
|
"Bart, it's not about how many stocks you have, it's about how much copper wire you can get out of the building." --- Homer Simpson |
|
|
| |
Topic |
|
|
|
Dow climbs 416.66 for its biggest gain in 5 years
Forum Locked
