Wall Street soars as government pledges bank aid

Local News

October 14, 2008

Anonymous Picayune Item Tue Oct 14, 2008, 09:37 AM CDT

NEW YORK, NY — 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.

The market was likely to rebound after eight days of precipitous losses that took the Dow down nearly 2,400 points, but no one expected this kind of advance, which saw the Dow by far outstrip its previous record for a one-day point gain, 499.19, set during the waning days of the dot-com boom.

Still, while the magnitude of Monday’s gains stunned investors and analysts, no one was 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.

“My screen in completely green and I love that, but I’m not doing any backflips yet. We still have many challenges up ahead,” Lynch said, noting the ongoing strains in credit markets and forecasts for poor corporate earnings for 2009.

Denis Amato, chief investment officer at Ancora Advisors, said it’s too soon to say whether the market has started to carve out a bottom and that the credit markets where many companies turn for day-to-day loans will need to loosen for stocks to hold their gains. With the U.S. bond markets and banks closed Monday for Columbus Day, it was difficult for investors to gauge the reaction of the credit markets to actions by major governments.

He said the severity of the selling last week was one possible signal that the market might be nearing a bottom and that the stepped up intervention of the government is a welcome sign for the markets.

“I think we had enough negatives last week that if the government steps in we could have a pretty nice run. Is it off to the races? No, I don’t think so. We have a lot of stuff to work through.”

The market did appear to take heart when the Bush administration said it is moving quickly to implement its $700 billion rescue program, including consulting with law firms about the mechanics of buying ownership shares in a broad number of banks to help revive the stagnant credit markets and in turn get the economy moving again.

Neel Kashkari, the assistant Treasury secretary who is interim head of the program, said in a speech Monday officials were also developing guidelines to govern the purchase of soured mortgage-related assets. However, he gave few details about how the program will actually buy bad assets and bank stock.

A relatively tame finish to Friday’s session and a weekend off gave analysts and investors some time to reassess last week’s tumultuous trading. And stock prices that were decimated by frenetic selling are now looking attractive.

Jim King, chief investment officer at National Penn Investors Trust Co., said the fear that took hold of the markets last week was overwrought and could signal that a bottom is near. When selling turns so frenetic that it hits a broad swath of stocks indiscriminately, as it did last week, many market watchers say a market low is at hand. That creates opporunity, King noted.

“We have exceptional companies at fire sale prices,” he said.

Still, King cautioned that any market rebound likely will be choppy.

“Even if this is the beginning of a recovery we’re not just going to have up markets from here on in,” he said. “We’re not through the woods. We think there is collateral damage from this debacle.” King pointed to an increase in unemployment and nervousness among consumers that could, for example, hurt retailers and in turn, take stocks lower.

According to preliminary calculations, the Dow Jones industrial average rose 936.42, or 11.08 percent, to 9,387.61. It was the Dow’s largest-ever point gain during a session, surpassing the jump of 503.45 points seen on Sept. 30.

The Dow’s previous record for a point increase by the time the closing bell sounded occurred March 16, 2000, when the blue chips closed up 499.19, or 4.93 percent.

Broader stock indicators also jumped Monday. The Standard & Poor’s 500 index advanced 104.13, or 11.58 percent, to 1,003.35, and the Nasdaq composite index rose 194.74, or 11.81 percent, to 1,844.25.

Text Only

Local News

SAFETY DAY Picayune Police officers made a visit to the First Baptist Church of Picayune’s preschool class for their Community Helpers Safety Day. During the event the kids got to meet police officers and trigger lights and sirens in patrol vehicles.
February 9, 2012 1 Photo
Escapee caught in county Pearl River County Sheriff’s deputies have captured the inmate who escaped from Mississippi Department of Corrections custody on Friday after attending his father’s wake in Picayune.
February 9, 2012
Council discusses which funds to spend first On the same day as the ground breaking for the addition to the historic City Hall, city council members discussed which funds to spend first in its construction.
February 9, 2012
Poplarville aldermen honor Holliday, get audit report briefing The city board of aldermen honored former District Three Supervisor Hudson Holliday at its Tuesday night meeting. Mayor Billy Spiers presented Holliday with a framed resolution of appreciation for his dedication and service to the city while serving as county supervisor.
February 9, 2012 1 Photo
MRI INSTALLED
This $1.2 million Magnetic Resonance Imaging equipment was installed at the new location of Highland Community Hospital.

February 8, 2012 1 Photo
Hall suspected of robbery after escaping
A man who escaped from jail after attending his father’s wake is suspected of having carried out an armed robbery on the Texas-Arkansas state line. Johnny Hall escaped from Mississippi Department of Corrections custody on Friday while attending his father’s wake in Picayune.

February 8, 2012 1 Photo
City Hall expansion groundbreaking held
A groundbreaking ceremony was held Tuesday at the construction site for the expansion of the historic Picayune City Hall. “You can see our future when you look down Goodyear Boulevard. You see Chimney Square, our high school, The Link at First Baptist Church, Jack Read Park and then our historic City Hall.

February 8, 2012 1 Photo
PRC athletic director says he’ll recommend random drug testing
Pearl River Central athletic director Andy Kivlan told the school board at its Monday night meeting that he will most likely recommend that students participating in extracurricular activities, including band and ROTC, be subject to random drug screening.

February 8, 2012
Supervisors adopt resolution encouraging more economic development in South Miss.
Following a short presentation by State Sen. Tony Smith (R-Picayune), the board of supervisors adopted on Monday a resolution encouraging state officials and agencies to exercise “fairness and parity” regarding location of new industries in Mississippi.

February 7, 2012 1 Photo
MDEQ wants comprehensive waste disposal plan from county
The Mississippi Department of Environmental Quality has told Pearl River County it wants a comprehensive waste disposal plan for the county. Supervisors indicated at their Monday meeting that they are not happy with the request.

February 7, 2012
More Local News Headlines

Local News

Search Results

Wall Street soars as government pledges bank aid

Site Map

Contact Us