MrMarcus1914 Posted March 23, 2009 Share Posted March 23, 2009 Dow jumps close to 400 points Wall Street welcomes Obama administration plan to buy up close to $1 trillion in bad bank assets. By Alexandra Twin, CNNMoney.com senior writer Last Updated: March 23, 2009: 3:25 PM ET NEW YORK (CNNMoney.com) -- Stocks recharged a rally Monday after Treasury's plan to buy up billions in bad bank assets and a better-than-expected existing home sales report raised hopes that the economy is stabilizing. The Dow Jones industrial average (INDU) gained 390 points, or 5.3%, with 40 minutes left in the session. The S&P 500 (SPX) index rose 42 points, or 5.6%. The Nasdaq composite (COMP) added 74 points, or 5.1%. "I think the stock reaction is a vote of confidence in the plan," said Jack Ablin, chief investment officer at Harris Private Bank. He said the stock market is also reacting well because the plan is skewed in favor of the private investor, who only has to be responsible for around 7% of the total in any transaction. But other analysts were less sanguine. "The plan is a rehash of what we've seen before and it still doesn't resolve the issue of how to value the bad assets," said Stephen Leeb, president at Leeb Capital Management. "There's a lot of cash on the sidelines, there's a real wish to believe that this is a solution and there has been some good news on the economy lately," he said. "All of that is contributing to a rally as well." Stocks have gained for the past two weeks, despite tumbling last Thursday and Friday. But that retreat gave investors an opportunity to jump back in Monday, with bank shares leading the advance. Since tumbling to 12-year lows two weeks ago, the S&P 500 has now rallied 18% as of Monday afternoon. But even with the enthusiasm Monday, the S&P 500 was struggling to hold above 800, a key resistance level that analysts say it will need to surpass if the market is going to be able to make a sustained move higher. Bad-asset plan: On Monday, Treasury rolled out its long-awaited plan to purge bank balance sheets of as much as $1 trillion in sour assets that are limiting lending and prolonging the recession. The government will commit $75 billion to $100 billion of taxpayer money to launch the "Public-Private Investment Program," which seeks to create a market for that bad debt. The government plans to run auctions between the banks looking to unload the bad assets - such as subprime mortgages - and the investors looking to buy them. The Federal Reserve and the Federal Deposit Insurance Corp. will be involved. Economists have said that stabilizing the banking system is key to stabilizing the economy. "Between the Fed announcement last week and the Treasury program this week, there are some tangible steps the government is taking and that is going to give the market the potential to keep moving higher," Ablin said. Last week, the Federal Reserve announced it was pumping another trillion into the economy to try to get credit flowing. Leeb said the market may be betting that if the Treasury plan leads into a brick wall, there's always the Federal Reserve to come in and expand its program. Economy: Existing home sales rose 5.1% in February, according to the National Association of Realtors. Sales rose at a seasonally-adjusted 4.72 million unit annual rate versus a 4.49 million unit annual rate in January. Economists surveyed by Briefing.com expected sales to dip to a 4.45 million unit rate. Company news: Bank shares led the advance. Citigroup (C, Fortune 500) jumped 17%, Bank of America (BAC, Fortune 500) jumped 18% and Wells Fargo (WFC, Fortune 500) gained 11%. The KBW Bank (BKX) index gained 12%. Suncor Energy (SU), Canada's No. 2 oil company, said it will buy rival Petro-Canada (PCZ) for $14.86 billion to create the country's biggest energy group. Suncor shares lost 1% and Petro shares gained 23%. In other deal news, an Abu Dhabi fund, Aabar Investments, bought a 9.1% stake in German carmaker Daimler in a $2.67 billion deal announced late Sunday. Market breadth was positive. On the New York Stock Exchange, winners beat losers by over 8 to 1 on volume of almost 1 billion shares. On the Nasdaq, advancers topped decliners four to one on volume of 1.5 billion shares. Bonds: Treasury prices dipped, raising the yield on the benchmark 10-year note to 2.64%, up from 2.63% late Friday. Treasury prices and yields move in opposite directions. Lending rates were little changed. The 3-month Libor rate held steady at 1.22%, unchanged from late Friday, while the overnight Libor rate rose to 0.29% from 0.28% Friday, according to Bloomberg.com. Libor is a bank-to-bank lending rate. Other markets: In global trading, Asian and European markets rallied. In currency trading, the dollar gained versus the euro and the yen. U.S. light crude oil for May delivery gained $1.44 to $53.51 a barrel on the New York Mercantile Exchange. COMEX gold for April delivery fell $3.70 to 952.50 an ounce. First Published: March 23, 2009: 11:05 AM ET There has been a lot of critics regarding the FED'S plans to help the economy. What do you think about these numbers? Is it a positive indication that the worst is over, or a oasis is the middle of this crisis? Link to comment Share on other sites More sharing options...
Mark The Homer Posted March 23, 2009 Share Posted March 23, 2009 Yeah baby! http://money.cnn.com/data/markets/dow/ Link to comment Share on other sites More sharing options...
Heisenberg Posted March 23, 2009 Share Posted March 23, 2009 What part of the lunar cycle are we in? If there's one thing I've learned from this site it's the fact that the stock market is completely driven by the moon. Link to comment Share on other sites More sharing options...
Redskins Diehard Posted March 23, 2009 Share Posted March 23, 2009 I think this is good...but not really an indication of anything significant with respect to the economy. It means some people have decided to buy some stock(well a lot of people decided to buy a lot of stock) Link to comment Share on other sites More sharing options...
Duckus Posted March 23, 2009 Share Posted March 23, 2009 470+, 6.5%. Impressive day. Hopefully this 2 week surge keeps on going. Link to comment Share on other sites More sharing options...
Kilmer17 Posted March 23, 2009 Share Posted March 23, 2009 Great news. Really great news. I hate what it takes now to get this kind of reaction, but at least it seems to be positively recieved. Link to comment Share on other sites More sharing options...
Monte51Coleman Posted March 23, 2009 Share Posted March 23, 2009 What part of the lunar cycle are we in? If there's one thing I've learned from this site it's the fact that the stock market is completely driven by the moon. And Ladell Betts. Link to comment Share on other sites More sharing options...
Duckus Posted March 23, 2009 Share Posted March 23, 2009 Edit the title 501 - WOW. 500 point rally!!!!!! Link to comment Share on other sites More sharing options...
Hubbs Posted March 23, 2009 Share Posted March 23, 2009 What part of the lunar cycle are we in? If there's one thing I've learned from this site it's the fact that the stock market is completely driven by the moon. I LOL'd. Link to comment Share on other sites More sharing options...
Toe Jam Posted March 23, 2009 Share Posted March 23, 2009 So the rich are getting richer again? Cool. Link to comment Share on other sites More sharing options...
Skinz4Life12 Posted March 23, 2009 Share Posted March 23, 2009 +500 wow!!! Link to comment Share on other sites More sharing options...
Heisenberg Posted March 23, 2009 Share Posted March 23, 2009 So the rich are getting richer again?Cool. I hope you were just joking. In case you weren't I hope you realize that the stock market recovering is a good thing for every income bracket. Link to comment Share on other sites More sharing options...
DeanCollins Posted March 23, 2009 Share Posted March 23, 2009 so, the average 401K is now only down 57.3%, techboy will be pleased. In other news my rental properties are still paying the same. Link to comment Share on other sites More sharing options...
Toe Jam Posted March 23, 2009 Share Posted March 23, 2009 I hope you were just joking.In case you weren't I hope you realize that the stock market recovering is a good thing for every income bracket. Tis' was a joke. My humor is hard to get sometimes. Link to comment Share on other sites More sharing options...
StillUnknown Posted March 23, 2009 Share Posted March 23, 2009 up is better than down Link to comment Share on other sites More sharing options...
Redskins Diehard Posted March 23, 2009 Share Posted March 23, 2009 Tis' was a joke.My humor is hard to get sometimes. Usually because it isn't actually funny Link to comment Share on other sites More sharing options...
wantarace17 Posted March 23, 2009 Share Posted March 23, 2009 I am so pissed i didn't buy some of citi when it was at 1 dollar. I would have made a killing today. Link to comment Share on other sites More sharing options...
Mark The Homer Posted March 23, 2009 Share Posted March 23, 2009 so, the average 401K is now only down 57.3%, techboy will be pleased. In other news my rental properties are still paying the same. I'm gonna guess that techboy will be indifferent... Link to comment Share on other sites More sharing options...
@DCGoldPants Posted March 23, 2009 Share Posted March 23, 2009 what happened today was good. Still, the markets need to have months and months of at least 3 up weeks to recover everything that was lost. Hopefully things calm down. We get a steady climb. People who deserve loans will get them, and maybe things start to consistently move in the right direction. There are a lot of hard working good people out there who were stung by this. The lazy folks who were looking for get rich quick schemes I don't feel sorry for. The couple who put their lives into their 401K's and retirement, I do. Link to comment Share on other sites More sharing options...
G.A.C.O.L.B. Posted March 23, 2009 Share Posted March 23, 2009 I think it's time for me to start a petition to put Obama on the dime. Link to comment Share on other sites More sharing options...
SUSkinsFan Posted March 23, 2009 Share Posted March 23, 2009 I think it's time for me to start a petition to put Obama on the dime.I agree. Since many on the right believed he tanked the economy, this surge must also be credited to him. Link to comment Share on other sites More sharing options...
Redskins Diehard Posted March 23, 2009 Share Posted March 23, 2009 I agree. Since many on the right believed he tanked the economy, this surge must also be credited to him. Many "on the right" disagree that some of the economic policies are not good for the long term health of the economy...this surge has nothing to do with that. Well at least there is no way to tell that now. Be like someone arguing for the benefits of Gitmo after a successful predator strike. Link to comment Share on other sites More sharing options...
Buford T. Justice Posted March 23, 2009 Share Posted March 23, 2009 Since many on the right believed he tanked the economy, this surge must also be credited to him. I understand your logic but I think it is too early to judge either way. Link to comment Share on other sites More sharing options...
WVUforREDSKINS Posted March 23, 2009 Share Posted March 23, 2009 I am so pissed i didn't buy some of citi when it was at 1 dollar. I would have made a killing today. My parents lost over 50K in Citi alone. What did Citi do today? Link to comment Share on other sites More sharing options...
Mark The Homer Posted March 23, 2009 Share Posted March 23, 2009 My parents lost over 50K in Citi alone.What did Citi do today? Up almost 20%http://www.google.com/finance?client=ob&q=NYSE:C Link to comment Share on other sites More sharing options...
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