Breaking News: Dow Jumps Almost 500 Points
Everybody has been chomping at the bit to jump in on the stock market. We all know now is the time to buy low. There is money to be made. The problem is, just exactly when to jump in. Today was that day. The market rose 6 percent including The Dow which jumped 407 points. This is the fifth biggest point gain in history.
As The Treasury Department explained its public-private partnership to purchase $500 billion to $1 trillion in toxic assets from the major banks, bank shares surged on the market. Bank of America and Citigroup shares rose by double digits.
According to Barry Ritholtz, chief executive of Fusion IQ, traders know a boatload of cash is headed their way. The news is so encouraging that many industry insiders feel we have hit the bottom and are on our way up. They may be sharing this hope in hushed tones, but the spectacular jump in the market is indicative that just maybe we’re on a roll.
Breaking News: Stock Market Stats
At the closing bell today, the Dow Jones industrial average was 497.48 points, a rise of 6.8 percent. Standard & Poor’s index rose 7 percent at 822.92. The Nasdaq was 6.7 percent higher at 1,555.77. This is the biggest one-point day gain since November and bank shares led the rally. Citigroup jumped 17 percent, Bank of American jumped 18 percent and Wells Fargo jumped 11 percent.
As if this isn’t good enough Dow breaking news, there was a 5 percent increase in existing home sales. Markets rose around the world as high as 2.6 percent as well. Financial analysts feel there are two contributors to the jump. One reason is that the Treasury Department has a plan. Without a plan, fears soar. The second reason for optimism is the combination of public and private investing with Geithner’s plan. The plan protects the private investor. They only have to pay 7 percent of the total in any transaction.
Breaking News: Treasury Department Outlines Plan
The government will hold auctions for the banks to sell off bad assets such as subprime mortgages. The Federal Reserve and the Federal Deposit Insurance Corporation will also be involved. The Treasury Department will use $700 billion from the government’s financial rescue fund for its cleanup program. The plan seeks to draw in private investors including big hedge funds. The government will offer low interest loans and will share the risks if the assets fall in value. The first bids go out in April.
Breaking News: Dow We Have Lift-off!
The government announcement about the program is what investors have waited to hear. When Timothy Geithner first released his plan a month ago, not enough details were available to satisfy investors. This all changed today as details became clear for the government-private investor plan that was announced by Geithner. We might say: “Stock Market, We Have Lift-off!”
New York Times: David Jolly and Bettina Wassener contributed breaking news reporting.
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