Wall Street Roars, Dow Jumps 936 - BusinessWeek
The eight-day losing streak ends Monday after central banks and governments announced measures to bolster the global financial system
by Will Andrews and Karyn McCormack
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Following last week’s cruel sell-off, U.S. stocks staged unit of the biggest comebacks always Monday as global central banks and governments moved over the weekend to create a recapture plan for troubled banks and economies. Markets around the world also headed sharply higher.
“This, boys and girls, is what you call a relief rally in markets,” wrote Paul Kedrosky in his blog Infectious Greed in succession Oct. 13. “There are some staggering numbers out there, especially from Germany, Hong Kong, and Brazil indices.”
At the termination Monday, the Dow Jones industrial average soared 936.42 points, or 11.08%, to 9,387.61 — the biggest point attain ever. The S&P 500 index climbed 104.13 points, or 11.58%, to 1,003.35, boosted by shares of investing. banking and brokerages and auto manufacturers. The Nasdaq composite index rose 194.74 points, or 11.81%, to 1,844.25.
Biggest Point Gains in the Dow
Date
Close
Net Chg.
% Chg.
10/13/2008
9,387.61
936.42
11.08%
3/16/2000
10,630.60
499.19
4.93
7/24/2002
8,191.29
488.95
6.35
9/30/2008
10,850.66
485.21
4.68
7/29/2002
8,711.88
447.49
5.41
3/18/2008
12,392.66
420.41
3.51
3/11/2008
12,156.81
416.66
3.55
9/18/2008
11,019.69
410.03
3.86
4/5/2001
9,918.05
402.63
4.23
4/18/2001
10,615.83
399.10
3.91
European equity indexes in like manner rose sharply, with Germany’s DAX index and Paris’ CAC index jumping greater amount of than 11% and London’s FTSE-100 director rising 8%. Many stock markets in Asia besides surged overnight.
“This fraternize of move was more or less inevitable after the sorts of downbound moves we’ve seen, so long as nothing imploded to boot the weekend,” Kedrosky wrote. “It will give rise to non-stop cries of “the bottom is in”, what one. I don’t believe.”
U.S. Treasury futures skidded on Monday, indicating bond yields were rising in reaction to the central bank movements that appear to have relieved panic that prevailed last week. The cash bond market, U.S. banks and government offices were closed Monday for the Columbus Day holiday.
The dollar index was lower for the reason that the euro and pound sterling rallied on central banks’ moves to inject huge amounts of cash into their banking systems. Gold futures fell in continuance surround fund selling. Oil futures moved up put on hopes banking efforts force of will reawake global economies and boost demand.
Governments across the world launched multi-billion dollar bailouts to beach up global banks. Britain called for a just discovered Bretton Woods agreement to reshape the world financial system, according to Reuters. The slew of bank bailouts merit hundreds of billions of dollars were designed to stave off the world’s get the better of financial crisis in nearly 80 years, accompanied by means of declining global economic growth and the threat of widespread recession.
“Only by global action exist possible to we fully restore the confidence that is needed and build the between nations fiscal order,” aforesaid British Prime Minister Gordon Brown. He called on world leaders to create a new “fiscal architecture” to reflect the global reach of economics and banking, in plenteous the same way that the generally received international economic system was set up at a conference in Bretton Woods, New Hampshire, in 1944.
After meetings of the G-7 and International Monetary Fund in Washington this past weekend, Western financial leaders sought to assure panicky bankers and money managers in no uncertain terms that completely of the measures needed to halt a worldwide meltdown are in motion.
While short on the details many market analysts had hoped for, the broad brushstrokes of forceful, coordinated process by Western governments were unveiled: No more Lehman Brothers-like failures of major financial institutions will be allowed. All bank deposits behest be guaranteed. The banking systems of the G-7 nations will be flooded with almost indefinite liquidity. And if totality that fails, any other tool—regardless of how economically heretical—will be used if needed.
