Archive for the ‘Dow Jones’ Category

U.S. Is Investing $250 Billion in Banks: Bush Addresses Financial Crisis

October 14, 2008
WASHINGTON — President Bush, speaking from the Rose Garden Tuesday before the markets opened in New York, called the government plan to invest up to $250 billion in banks essential to help assure stability in the nation’s financial system.

Under the proposal that is similar to those initiated by European governments on Monday, President Bush said the Treasury Department would invest up to $250 billion in banks, receiving an equity stake in return.

“This is an essential short-term measure to ensure the viability of the American banking system,” Mr. Bush said.

The United States would also guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers, officials said.

The Federal Deposit Insurance Corporation would also offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees.

In addition, Mr. Bush said the Federal Reserve would start a program to become the buyer of last resort for commercial paper, a move intended to help businesses get the money they need for day-to-day operations.

Mr. Bush’s comments were the latest in series by administration officials and government leaders around the world to try to calm the financial turmoil and help stave off a deep recession. And markets around the world have rebounded on news of the coordinated efforts by various governments. The Dow Jones industrial average gained 936 points, or 11 percent, the largest single-day gain in the American stock market since the 1930s and future indexes were substantially higher. European markets were up at least 5 percent on Tuesday after rising nearing 10 percent Monday.

The president described the four measures as “unprecedented and aggressive.” Each of the new programs protects taxpayers and is “limited and temporary,” Mr. Bush said.

“These measures are not intended to take over the free market,” he said, but to safeguard it.

It will take time for our efforts to have their full impact,” Mr. Bush said, “but the American people can have confidence about our long-term economic future.

As the White House has done since the House rejected the initial bailout legislation, Mr. Bush sought to assure Americans that the efforts were necessary to protect their savings and retirement.

“I recognize that the action leaders are taking here in Washington and in European capitals can seem distant from those concerns,” he said. “But these efforts are designed to directly benefit the American people by stabilizing our overall financial system and helping our economy recover.”

Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at a meeting Monday afternoon d. He essentially told the participants that they would have to accept government investment for the good of the American financial system, according to officials.

Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase, officials said. The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes.

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http://www.nytimes.com/2008/10/15/business/economy/15bailout.
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Dow jumps 936 as governments pledge bank aid

October 13, 2008

By TIM PARADIS, AP Business Writer 

NEW YORK – Wall Street stormed back from last week’s devastating losses Monday, sending the Dow Jones industrials soaring a nearly inconceivable 936 points after major governments’ plans to support the global banking system reassured distraught investors. All the major indexes rose more than 11 percent.
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The market was expected to rebound after eight days of precipitous losses that took the Dow down nearly 2,400 points, but few expected this kind of advance, which saw the Dow by far outstrip its previous record one-day point gain, 499.19, set during the waning days of the dot-com boom. The Standard & Poor’s 500 index also set a record for a one-day point gains.

Trader Thomas Riley, right, smiles as he works on the floor ... 
Trader Thomas Riley, right, smiles as he works on the floor of the New York Stock Exchange, Monday Oct. 13, 2008. Wall Street stormed back from last week’s devastating losses Monday, sending the Dow Jones industrials soaring a nearly inconceivable 936 points after major governments’ plans to support the global banking system reassured distraught investors.(AP Photo/Richard Drew)

There were cheers and applause on the floor of the New York Stock Exchange at the closing bell, and trading was so active that prices were still being computed several minutes after the closing bell, longer than it would take on a quieter day.

Still, while the magnitude of Monday’s gains stunned investors and analysts, few were ready to say Wall Street had reached a bottom. The market is likely to have back-and-forth trading in the coming days and weeks — and may well see a pullback when trading resumes Tuesday — as investors work through their concerns about the banking sector, the stagnant credit markets and the overall economy.

John Lynch, chief market analyst for Evergreen Investments in Charlotte, N.C., said Monday’s rally was encouraging but he doubted it signaled the worst has passed.

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http://news.yahoo.com/s/ap/20081013/ap_on_bi_st_
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World powers pledge to combat credit crisis

October 11, 2008

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON – Financial officials from the world’s wealthiest industrial countries are pledging decisive action to deal with the biggest upheavals to hit the global financial system since the Great Depression.

The big question is whether their one-page action plan will be enough to stop the bleeding as investors watch trillions of dollars of wealth melt away.

In an effort to expand the firepower the United States is bringing to the problem, Treasury Secretary Henry Paulson announced late Friday that it had decided to go forward with a plan to buy a part ownership in a broad array of American banks. It would be the first time the U.S. government has employed such a program since the 1930s.

President Bush invited Paulson and Federal Reserve Chairman Ben Bernanke and their counterparts from the other G-7 countries to come to the White House Saturday morning for a meeting that the administration hoped would demonstrate global resolve in attacking the current crisis.

Bush, speaking on the economic chaos for the 21st time out of the past 26 days, said Friday that the government’s rescue program was aggressive enough and big enough to work. “We can solve this crisis and we will,” he pledged.

The G-7 officials wrapped up three hours of closed-door talks Friday with one of the shortest joint communiques in the history of the group. It was also the most direct in its promise to take “all necessary steps to unfreeze credit and money markets” to end a severe credit crisis that began in the U.S. a year ago but since has spread worldwide and has grown in furiosity.

Fears that banking systems had essentially frozen up have sent worried investors rushing for the exits. The Dow Jones industrial average just completed its worst week in history and has plunged by nearly 2,400 points over the past eight trading sessions. Over the last year, investors have suffered $8.4 trillion in paper losses.

In the midst of all that carnage, the G-7 countries — the United States, Japan, Germany, France, Britain, Italy and Canada — sought to strike a determined tone to do what they could to combat the problem in their countries.

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http://news.yahoo.com/s/ap/20081011/ap_on_bi_ge/
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Stocks soar, Dow rises 420 points

March 18, 2008
By MADLEN READ, AP Business Writer 

NEW YORK – Wall Street stormed higher Tuesday as investors, optimistic following stronger-than-expected earnings from two big investment banks, were also galvanized by the Federal Reserve‘s decision to cut interest rates by three-quarters of a percentage point. The Dow Jones industrial average soared 420 points, its biggest one-day point gain in more than five years.

Trader Vincent Quinones, foreground right, gathers with other ...
Trader Vincent Quinones, foreground right, gathers with other traders on the floor of the New York Stock Exchange, Tuesday March 18, 2008. Wall Street gave up some of its steep gains Tuesday while investors digested the Federal Reserve’s decision to cut interest rates by three-quarters of a percentage point. Many investors had expected a cut of a full percentage point.(AP Photo/Richard Drew)

Many investors were expecting the Fed to cut rates a full point, but appeared to overcome their early disappointment, especially since a 0.75 point cut is still substantial. The central bank’s benchmark fed funds rate is now at 2.25 percent — its lowest level since December 2004, and less than half what it was last summer. The Fed began lowering rates exactly six months ago, after the credit markets seized up due to soaring defaults in subprime mortgages.

In its statement accompanying the rate decision, the Fed said “recent information indicates that the outlook for economic activity has weakened further,” but also that “uncertainty about the inflation outlook has increased.”

“The Fed once again in the statement showed that it is ready for further action if this were needed,” said Christian Menegatti, lead analyst for online economic research firm RGE Monitor. “It also showed the fact that it’s still paying attention to inflation … but that it is far from being the primary concern right now. And the market knows that, and it is happy.”

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http://news.yahoo.com/s/ap/20080318/ap_on_bi_
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Stocks fall amid economic jitters

November 21, 2007

By TIM PARADIS, AP Business Writer 

NEW YORK – Wall Street resumed its slide Wednesday as unease about the wilting mortgage market and the broader economy triggered selling ahead of the unofficial start of the holiday shopping season. The Standard & Poor’s 500 index and the Dow Jones industrial average each fell by more than 1.5 percent, with the Dow giving up more than 210 points.

The decline in the S&P 500 left the index in negative territory for the year. Many investments such as mutual funds either track or are measured against the S&P.

The worries over the economy sent investors rushing to the safety of government securities. The yield on the Treasury’s 10-year note for a time fell below 4 percent for the first time since 2005. The shift into bonds came as the Dow briefly sank below the lows seen in the market’s August pullback.
A street sign is seen in front of an American flag hanging on the front of the New York Stock Exchange August 9, 2007. Wall Street bonuses, on average, will be little changed this year, but not since 1998 will the gap between the haves and have-lots be so great. (Lucas Jackson/Reuters)
Wall Street in New York…..

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Related:
U.S. Economy: Storm Warning

Economy: Housing Market Plunges Deeper

October 25, 2007

By Patrice Hill
The Washington Times
October 25, 2007

The fallout from the mortgage crunch worsened substantially yesterday, with single-family home sales plummeting to the lowest level since 1998 and Merrill Lynch reporting an unprecedented $7.9 billion write-down for bad loans — the latest in a weeklong series of setbacks for the economy and the markets.

The news drove down the Dow Jones Industrial Average by as much as 200 points, but the index regained all the ground it lost after economists said the dire straits facing financial and housing companies — and the unknown effect it will have on consumers — will prompt the Federal Reserve to cut interest rates again next week to rescue the faltering economy.

The news from Merrill Lynch — which reported the biggest quarterly loss in its 93 years of existence — was particularly “startling” and “staggering,” said Standard & Poor’s Corp., as the world’s largest brokerage had been considered healthy and relatively immune to the mortgage virus infecting other big banks on Wall Street.

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http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20071025/BUSINESS/110250036/1001

Stock Market: Bullish on Bush

July 22, 2007

Lawrence Kudlow
July 22, 2007

It has been widely reported that President Bush simply refuses to turn against the surge in Iraq, or even compromise on it. At the same time he admonishes Congress to toss out troop-withdrawal timetables and to give Gen. David Petraeus’ new counterinsurgency plan time to work.

And you know what? While the Democrats stand against near all of the president’s wartime policies — and in the process court defeat — the stock market is standing with Mr. Bush, and the chance for victory.

Early last week, when the Democratic leadership …

http://washingtontimes.com/article/20070722/
COMMENTARY04/107220022/1012/COMMENTARY