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POLL: Wall Street snaps back; surges after opening bell
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NEW YORK — Wall Street is snapping back from last week's devastating losses on growing hopes the stock market will finally find some footing. Investors are cautiously optimistic after the Bush administration and European governments pledged coordinated actions to help the crippled financial system. The Treasury has said it plans to buy U.S. bank stocks.
A rebound was to expected at some point after the Dow Jones industrials lost nearly 2,400 points over eight sessions. But the rally, which saw the Dow shoot up more than 400 points in the first minutes of trading, doesn't mean that the market is now finished with the intense volatility of recent weeks.
Investors in Asia and later Europe were already buying, grabbing stocks after last week's rout and action by major governments over the weekend to bolster investor confidence.
Overseas, Hong Kong's Hang Seng index surged 10.2 percent. Markets in Japan were closed for a holiday. In afternoon trading, Britain's FTSE 100 jumped 3.83 percent, Germany's DAX index rose 6.84 percent, and France's CAC-40 jumped 4.37 percent.
Still, while the markets were upbeat early Monday, they were also well aware that there is much to be done to heal the banking system and the credit markets that have come to a virtual halt. Moreover, even if there is heavy buying when trading opens Monday, Wall Street can expect to see back-and-forth trading in the coming days and weeks as investors remain nervous.
Investors awaited details of the U.S. plan to resuscitate the financial system following word from the Bank of England that it would use up to $63 billion to the three largest British banks to help shore up their balance sheets.
The Bush administration is working on implementing its $700 billion financial rescue plan. The White House is consulting with six private law firms to determine the best way to buy ownership stakes in a broad number of banks. The plan to buy shares of banks is aimed at getting capital to financial institutions faster than purchasing their soured mortgage-backed assets.
Neel Kashkari, the assistant Treasury secretary who is interim head of the program, said officials have been developing rule to govern the purchase of soured assets.
The Federal Reserve also said it would make enough U.S. dollar funds were available to meet demand.
The Bank of England, the European Central Bank and the Swiss National Bank jointly announced plans to work together to provide as much short-term funding as necessary to help revive lending. The Bank of Japan said it was considering taking similar steps.
After a series of weekend meetings in Washington of heads of the Group of Seven nations, strong gains in markets in Asia and Europe signaled that investors found comfort from the actions and pledges coming from government officials.
Bond markets are closed for the Columbus Day holiday. The dollar was mixed against other major currencies.
The surge in stock futures comes after a dismal week on Wall Street that erased an estimated $2.4 trillion in shareholder wealth. The Dow, after eight consecutive daily losses that totaled just under 2,400, or 22.1 percent, finished at its lowest level since April 2003, and also suffered its worst weekly percentage loss ever, a fall of 18.2 percent.
Meanwhile, the S&P 500 lost 15.3 percent and the Nasdaq composite index fell 15.3 percent.
Investors worried that banks' reluctance to lend to one another would imperil economic activity by making it harder and more expensive for businesses and consumers to get a loan.
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1st
you mean there may be some sort of optimism and there arent any comments? This article has been up since 9am 10/13
#1 Posted by NeezDutz on October 13, 2008 at 12:03 p.m. (Suggest removal)
c'mon people dont like hearing good news!
#2 Posted by trehuger on October 13, 2008 at 1:23 p.m. (Suggest removal)
It doesn't fit the script.
#3 Posted by pauls on October 13, 2008 at 3:43 p.m. (Suggest removal)
Can't believe the lack of comments
on this article.
Maybe Democrats looking at it as bad news?
Maybe Republicans out partying
over good news?
Maybe Independents not wishing to
take a stand?
Whatcha think?
#4 Posted by vivianped on October 13, 2008 at 5:10 p.m. (Suggest removal)
Democrats trying to figure out how to claim credit for good news while trying to keep any bad news exclusively Bush's fault.
#5 Posted by pauls on October 13, 2008 at 5:27 p.m. (Suggest removal)
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