Stocks Turn Lower Despite Bailout Plan OK

(AP)  Stocks ended a volatile week with another sell-off Friday while credit markets remained strained after enthusiasm over the government's $700 billion financial rescue plan gave way to worries about obstacles still facing the economy.

Investors dumped stocks late in the session after a big intraday rally, repeating a defensive move seen throughout the yearlong market pullback. As lawmakers voted on the plan, which President Bush quickly signed into law, the Dow advanced more than 300 points. After it passed, the blue chips moved in and out of positive territory before ending down more than 150 points.

Investors had been anxious for resolution on the government's plan to buy up bad assets from banks and other institutions to shore up the financial industry and help resuscitate credit markets. Trading across markets was volatile throughout the week as investors tried to determine whether the plan would win approval and what effect it might have. On Monday, the House's rejection took Wall Street and Capitol Hill by surprise and handed stocks their biggest losses in years.

The Senate subsequently passed a sweetened version of the plan that added tax breaks and raised the limit on federal deposit insurance from $100,000 to $250,000.

"We're three weeks into a severe credit crunch and it's causing untold economic damage to the country," said Hank Smith, chief investment officer at Haverford Investments. He said while the bill's passage will help Wall Street, the broader effects of the paralysis in the credit markets has yet to emerge.

"It's fairly reasonable to assume that this should help unfreeze the credit markets but what we don't know what's happened so far. How much of a dent has it put into the economy?"

The credit markets indicated increased demand for safety. The yield on the 3-month Treasury bill, the safest type of investment, fell to 0.49 percent from 0.70 percent late Thursday. Yields have remained low in recent weeks because investors are eager to safeguard their money.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.61 percent from 3.64 percent late Thursday.

According to preliminary calculations, the Dow fell 157.47, or 1.50 percent, to 10,325.38 after rising more than 310 points.

Broader stock indicators also ended lower. The Standard & Poor's 500 index fell 15.05, or 1.35 percent, to 1,099.23, and the Nasdaq composite index fell 29.33, or 1.48 percent, to 1,947.39.

[coqui00623]

And the beat goes on ... the rich get richer and the poor get poorer ... what foolish mortals these earthlings be ... wake up and smell the coffee. Anybody looking to buy a bridge in Brooklyn?

[sjc_1]

I just heard that 45% of the national debt is now foreign owned. At the end of all this perhaps 50% will be owned outside the country. I do not know about you, but the though of paying 100s of billions to people outside the country every year for the next 30-40 years does not make me happy.

[whitemale08]

The first time they tried to pass the bailout bill, Paulson and Co. was honest and said that there was no profit for the tax payer on this because the "tax payer is already on the hook".

The second time they tried to pass the bailout bill, Paulson and Co. was lying and said that there was a profit for the tax payer on this because the "tax payer is buying ''assets'' that will mature"

There is no value in these worthless debt ''assets'' because they are all ''derivatives'' with no ''real asset'' attatched to them like actually property; thesea are all gambling bets.

We are such ''suckers'' to bailout the banks, leave us in a depression and let the bankers escape to Dubai and hoard the money all to themselves.

We are so sooooo stupid.

This will not work, the stock market and your 401ks will be obliterated no matter what. And we will soon go into Marshall Law and then the North American Union, and our currency will be replaced by a regional currency called the Amero.

[nownthen-2009]

Bush and friends are losing their power so they are going for the money! We are getting $crewed again.
Vote them all out! VOTE FOR NO INCUMBENTS

[shanev137]

America the great.

It was nice knowing you.


R.I.P.
1776-2008

[talk2chief]

We the people of the United States exist no more. The recent 700 billion dollar bailout of the failed financial and banking industry illustrates that our congress only serves the top 1% of the very elite of American citizens. With the bailout they secure future lobby dollars and the middle class will become the serfdom of a national debt. Both the republican and democratic parties are engaged in an uncivil war of politics of petty party power differences and ignore the small people, the constituents they are supposed to represent. In September 2008 159,000 jobs are no more and a deep recession has arrived with more jobs sure to fade. House Speaker Nancy Pelosi stated the bill was required "begin to shape the financial stability of our country and the economic security of our people." Too late, the die is cast; throwing more tax payer dollars into the abyss (national debt) will not ward off economic failure.

[shanev137]

...but hey.....we just averted the second Great Depression.

So feel good out and feel good now and spend, spend spend.

hahahahahaha

[shanev137]

Even the Stock Market sees this bailout bill as a joke.

-----------

The market saw the non-passing of this bill as a joke too at the begging of the week.

[inventagod2]

What$ that huge $ucking $ound?

That$ Republicon$ ki$$ing Bu$h$ a$$...

[donevis-2009]

stocks down 14 points just before close. Even the Stock Market sees this bailout bill as a joke.

Posted by Oscarez at 03:53 PM : Oct 03, 2008

Look again hot dog man, a bit more drop in the points than you thought.