How about a little good news

By
Real Estate Agent with The Fischetti Group/Keller Williams

www.jimfischetti.com

 

 

 

 

Wall Street got the news it wanted on the economy's biggest problems - banks and housing - and responded with a rally that hurtled the Dow Jones industrials up nearly 500 points.

Investors added rocket fuel Monday to a two-week-old advance, cheering the government's plan to help banks remove bad assets from their books and also welcoming a report showing a surprising increase in home sales. Major stock indicators surged more than 6 percent, including the Dow.

The Treasury Department's bad asset cleanup program would tap money from the government's $700 billion financial rescue fund and involve help from the Federal Reserve, the Federal Deposit Insurance Corp. and the participation of private investors.

The government's announcement was what the market had waited weeks to hear. Treasury Secretary Timothy Geithner had announced an outline of the program last month but provided few details then about how it would work, leading to a plunge on Wall Street that sliced 380 points from the Dow.

Meanwhile, the National Association of Realtors' existing home sales report was overwhelmingly positive for the market although it showed a decline in home prices in February. Investors are embracing any sign that a glut in homes for sale may be easing. Monday's data followed a dose of good housing news last week as housing starts for February came in much better than expected.

Collapsing home prices and the damage they have caused banks are at the center of the economy's current problems and are a major focus for the stock market. Banks have sharply curbed lending after becoming weighed down with loans that have gone bad, especially mortgages.

Investors had been largely disappointed in the government's efforts to date to restore the banks to health, but finally seemed encouraged by the long-awaited announcement Monday of details for the government's bad loan cleanup plan.

"The actions that we're getting from a policy standpoint are very helpful in removing the sand from the gears," said Alan Gayle, senior investment strategist at RidgeWorth Investments. "That is going to be good for the financials."

The plan seeks to draw in private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases. The government will share the risks if the assets fall further in price.

Shares of the country's largest banks, which have been pounded in recent weeks over concerns about their ability to weather the crisis, soared on Monday. Citigroup Inc. jumped 19.5 percent, and Bank of America Corp. added 26 percent.

Even banks seen as being on better footing posted big advances. JPMorgan Chase & Co. rose 25 percent, while Wells Fargo & Co. rose 24 percent.

According to preliminary calculations, the Dow rose 497.48, or 6.8 percent, to 7,775.86. That was the biggest point gain for the blue chips in more than four months.

Broader stock indicators also surged. The Standard & Poor's 500 index rose 54.38, or 7.1 percent, to 822.92, crossing the psychological milepost of 800. The Nasdaq composite index rose 98.50, or 6.8 percent, to 1,555.77.

The Russell 2000 index of smaller companies rose 33.61, or 8.4 percent, to 433.72.

More than 10 stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.9 billion shares.

 

Thanks to Yahoo News.

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Ambassador
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Craig Rutman
Raleigh, Cary, Apex area Realtor
Helping people in transition

It's about time for some good news!

I know MY portofolio liked the makret today!

Thank you for sharing this with us Jim.

It's a great way to start the week.

March 23, 2009 04:05 PM
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Jim Fischetti

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Celebrates all the hard working sales people who really make this economy ROAR!!