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Elbow
03-23-2009, 11:56 AM
NEW YORK – Wall Street is getting the good news it wants on the economy's biggest problems: banks and housing.

Investors reignited a two-week rally Monday, cheering the government's plan to help banks remove bad assets from their books as well as a report showing a surprising increase in home sales. Major stock indicators jumped more than 4 percent including the Dow Jones industrial average, which surged 300 points.

The Treasury Department said its plan would rely on the government's $700 billion financial rescue fund, the Federal Reserve and the Federal Deposit Insurance Corp., as well as private investors.

The housing report was overwhelmingly positive for the markets even though it showed a decline in home prices. Investors are embracing any sign that a glut in homes for sale may be easing.

The market got another dose of good news last week on the troubled industry 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 beaten down in recent weeks over concerns about their ability to weather the crisis, soared on Monday. Citigroup Inc. jumped 17 percent, and Bank of America Corp. added 15 percent.

Even banks regarded as more sound posted big advances. JPMorgan Chase & Co. rose 12 percent, while Wells Fargo & Co. rose 12 percent.

In midday trading, the Dow rose 313.57, or 4.3 percent, to 7,591.95.

Broader stock indicators also surged. The Standard & Poor's 500 index rose 34.20, or 4.5 percent, to 802.74, and the Nasdaq composite index rose 60.67, or 4.2 percent, to 1,517.94.

The Russell 2000 index of smaller companies rose 20.30, or 5.1 percent, to 420.41.

About 10 stocks rose for every one that fell on the New York Stock Exchange, where volume came to 579.2 million shares.

Monday's advance is bolstering an upbeat mood on Wall Street which has taken hold in the past two weeks. The Dow is coming off its first back-to-back weekly gains in close to a year.

Stocks began rising sharply on March 10 after Citi and BofA told investors they had made money in the first two months of the year. Better-than-expected reports on retail sales and home building also lifted the market.

Bond prices rose following the Federal Reserve's announcement last week that it would buy government debt to help drive down borrowing costs by reducing interest rates.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.63 percent from 2.64 percent late Friday. The yield on the three-month T-bill rose to 0.21 percent from 0.19 percent Friday.

Oil rose $1.28 to $53.35 a barrel and the dollar was mixed against other major currencies. Gold prices fell.

Homebuilders extended an early rise after the home sales report. KBR Inc. rose 39 cents, or 2.8 percent, to $14.22, while Toll Brothers Inc. rose 94 cents, or 5.5 percent, to $17.93. Hovnanian Enterprises Inc. jumped 28 cents, or 24 percent, to $1.46.

In corporate news, Daimler rose following the announcement that Abu Dhabi-based Aabar Investments PJSC would buy a stake in the automaker best known for its Mercedes-Benz brand. Daimler rose 93 cents, or 3.3 percent, to $29.38.

Investors snapped up some stocks after quarterly results came in ahead of Wall Street's low expectations.

Drugstore chain Walgreen Co. says its earnings fell 7 percent in the fiscal second quarter because of costs for its restructuring plan even as retail prescriptions grew, bucking an industry trend. Walgreen rose $2.61, or 11 percent, to $26.90.

Jewelry retailer Tiffany & Co. said its fourth-quarter profit plunged more than 75 percent after a steep drop in sales over the holiday season. Tiffany rose $3.07, or 15 percent, to $23.30.

Overseas, Britain's FTSE 100 rose 2 percent in afternoon trading. Germany's DAX index rose 2 percent, and France's CAC-40 rose 2.6 percent. Japan's Nikkei stock average rose 3.4 percent.

-By TIM PARADIS, AP Business Writer

BanginJimmy
03-23-2009, 02:47 PM
all great news. I would love to say I was wrong about the bailout, but I will hold judgement for a while. Remember that the CBO and most other analists expected a short term boost for the economy before another drawback.

Vteckidd
03-23-2009, 02:52 PM
HOOOORAY THE RECESSION IS OVER!!!!!


/sarcasm

OG-Skinny
03-23-2009, 03:50 PM
HOOOORAY THE RECESSION IS OVER!!!!!


/sarcasm

WE are scraping the bottom right now, but i do believe it will start to see a incline after 2009 is over. Everything will just take time to come back.

There's still going to be some people who lose their home/business, big company's will still layoff employees, but everyone will have to adjust and learn to wait it out.

personally I think this is all good for people who just think they can get by doing the bare minimum. If your going to make it in this economy, bust your ass.

green91
03-24-2009, 08:37 PM
I know for a lot of younger guys like myself, these are the worst time's that we've seen yet. It's personally (forced) me to re-evaluate what i actually require to get by, and tighten my budgets. I think once we're through this mess of shit it will have at least been beneficial to many from an educational perspective

preferredduck
03-25-2009, 01:44 AM
a lot of chinese investors are buying up US property for the profit potential in the foreclosure market.

Paul
03-25-2009, 07:54 AM
loads of economist last fall were predicting we would see recovery signs spring/summer 09' ... we'll just have to wait and see how things go.

dorin48
03-25-2009, 10:23 AM
all great news. I would love to say I was wrong about the bailout, but I will hold judgement for a while. Remember that the CBO and most other analists expected a short term boost for the economy before another drawback.

Nothing to do with the bailout. Market jump was due to home sale jump. Now is just simpy the time to buy because deals are their best. Lots of homes just sitting and ready to go. Hell I bought a home because of this reason, I close in April. Obama's money dump hasnt hit the mainstream yet. While we were home shopping, good homes in our price range were turning over in ~5 days from hitting the listings to being under contract. I mean I guess we can give credit for intrest rates staying down.

preferredduck
03-26-2009, 03:12 AM
appartment buildings were on the rise big time, there is a lot of shift back to renting so it helped the figured in every dept.

Alan®
03-26-2009, 05:26 AM
loads of economist last fall were predicting we would see recovery signs spring/summer 09' ... we'll just have to wait and see how things go.
Personally I still think we have a WAYS to go before we see the bottom.

preferredduck
03-26-2009, 10:07 AM
Personally I still think we have a WAYS to go before we see the bottom.

i'm with you, that have not fuilly suckered in china yet, considering they are buying foreclosures by the droves now.

lawguy85
03-28-2009, 11:59 PM
The stock market continues sliding which it has for months and everyone blames Obama. The market starts to go up immediately after Geitner rolled out the administration's new plan to buy up toxic assets and get the credit market flowing again and suddenly it gas nothing to do with Obama. Blind rage and logic are mutually exclusive. If you logic dictates that his message caused the stock market to plummet the same logic must also dictate that his new message caused the market to begin rebounding. Jeez I see more baseless speculation here than I do on Coast to Coast. You have cause and effect clear as day, within a matter of hours, and you guys dismiss it b/c it doesn't comport with your worldview. Grow up, no ideology is right all the time. If it was there would only be one party.

sport_122
03-29-2009, 12:27 AM
Nothing to do with the bailout. Market jump was due to home sale jump. Now is just simpy the time to buy because deals are their best. Lots of homes just sitting and ready to go. Hell I bought a home because of this reason, I close in April. Obama's money dump hasnt hit the mainstream yet. While we were home shopping, good homes in our price range were turning over in ~5 days from hitting the listings to being under contract. I mean I guess we can give credit for intrest rates staying down.

agreed...

also this is a not the time to get all comfortable. There is going to be a huge decline in the value of the dollar over the course of the next two years, no telling how long its going to last. That means interest rates will shoot up on housing loans, credit cards, and vehicle purchases. Once that happens people will not be buying houses and taking out credit lines and things will slow down again.

the housing market could only steep so far because the interest rates would eventually get low enough that people would start buying. So all it really means is we had a national sale on housing. I don't believe this trend will continue when rates hit anywhere from 8-10+% to compensate for inflation.

And worldwide there are already discussions on removing the dollar as the base for currency exchange worldwide and even moving into a potential and very possible one world currency. That will devalue our money even more.

and finally, when all this mess is REALLy behind us, we will still be paying insanely high taxes which we don't even know what they are going to be because our govt is STILL printing and spending money we don't have.

sport_122
03-29-2009, 12:47 AM
The stock market continues sliding which it has for months and everyone blames Obama. The market starts to go up immediately after Geitner rolled out the administration's new plan to buy up toxic assets and get the credit market flowing again and suddenly it gas nothing to do with Obama. Blind rage and logic are mutually exclusive... If it was there would only be one party.

Cause and Effect is right,

There is also a place of where things were about as low as they were going to get for the time being. Did this administration help, yes, but don't give them the gold medal yet. The effects of all of these things are yet to be seen and immediate jump in stock means nothing to people who play the market and almost NOBODY says that this printing and spending is good for us in the long term. Immediate results and success was one of the things that led us into this met.

so just as some people don't want to give Obama any credit (I give him a little, but not much) You should make sure you keep your eyes on the effects of today's actions and remember that even though the stocks went up within hours you still have yet to see the full effect. Remember that bad debt is the same no matter who owns it. Our government didn't make it all okay. They just moved it into a different place.

Case in point.

Clinton administration pushes to get people in housing.
America looks prosperous and stocks go up because spending is high.
That all seems good until 7 years later many of those people cannot afford the housing, too many of us are pushing our credit over our limits, and all of that equals a huge financial crisis.

One good thing does not equal total success. Its a good sign but this is nowhere near over.

lawguy85
03-29-2009, 02:06 AM
Cause and Effect is right,

There is also a place of where things were about as low as they were going to get for the time being. Did this administration help, yes, but don't give them the gold medal yet. The effects of all of these things are yet to be seen and immediate jump in stock means nothing to people who play the market and almost NOBODY says that this printing and spending is good for us in the long term. Immediate results and success was one of the things that led us into this met.

so just as some people don't want to give Obama any credit (I give him a little, but not much) You should make sure you keep your eyes on the effects of today's actions and remember that even though the stocks went up within hours you still have yet to see the full effect. Remember that bad debt is the same no matter who owns it. Our government didn't make it all okay. They just moved it into a different place.

Case in point.

Clinton administration pushes to get people in housing.
America looks prosperous and stocks go up because spending is high.
That all seems good until 7 years later many of those people cannot afford the housing, too many of us are pushing our credit over our limits, and all of that equals a huge financial crisis.

One good thing does not equal total success. Its a good sign but this is nowhere near over.

You're absolutely right. I should have been clear, we're nowhere near being out of the woods, we just had a good week. But, if anything negative happens people are quick to blame the Obama administration even if they didn't have anything to do with it, but now that something has worked in the short term those same people are claiming this had nothing to do with the Obama administration. Listen, Bush was a great war president, but he was too simple minded to understand the economy. Obama will almost always be the smartest guy in the room, but he's so smart that he's stupid in a way to think that N. Korea or Iran can be settled through diplomacy. People need to take a hard look at themselves and determine why they have certain opinions. As the saying goes even a broken clock is right twice a day; if you look at a person and think they are always wrong, you have no critical thinking skills whatsoever. It's funny, I'm very libertarian, I founded the libertarian club in high school and college, and I'm one of the few libertarians who've read and understand the "Libertarian Manifesto" but I can't even express my views b/c of all the bull that gets tossed around here. Look at it this way, the worldwide economy has had a stroke. What do you do.......you defibrillate that shit. We've tried and failed, but that doesn't mean you quit. This toxic assets plan seems to be the right jolt, but more sweeping measures will probably be to much. In a normal market laissez faire works. However, greed and free flowing credit put us at an impasse. Something needs to be done and President Obama has the balls to get it done. Deal with it and hope his twice a day rebounds the economy.