Record Surge Gives Wall St. A Boost

Dow Soars More Than 900 Points As Governments Pledge Aid For Global Banking System

(CBS/AP)  Wall Street stormed back after its worst week ever and staged the biggest single-day stock rally since the Great Depression on Monday, catapulting the Dow Jones industrials to a 936-point gain and finally offering relief from eight consecutive days of stock market carnage.

While no one was saying the worst was over for the staggering financial system or troubled economy, buyers returned to the stock market with gusto, with some saying stocks had been driven down to fire-sale prices.

The surge came as executives from leading banks were summoned by the Bush administration to Washington to work out a plan to get loans, the lifeblood of the economy, moving again. And it followed signals that European governments would put nearly $2 trillion on the line to protect their own banks.

The Dow gained more than 11 percent. It was the biggest single daily percentage gain in 75 years - although the Dow is still down 13 percent this month, reports CBS News correspondent Anthony Mason.

By points it shattered the previous record for a one-day gain of 499, during the waning days of the technology boom in 2000.

"My screen is completely green, and I love that," said John Lynch, chief market analyst for Evergreen Investments in Charlotte, N.C. "But I'm not doing any backflips yet. We still have many challenges up ahead."

Stocks opened sharply higher and never looked back. The Dow was up more than 400 points in the opening minutes of trading, and by lunch hour had crossed back through the same 9,000 level it crashed below last week.

The rally intensified in the final hour of trading. In the moments before the closing bell rang, boisterous traders sounded horns on the floor of the New York Stock Exchange, and raucous applause broke out.

"I would say this is closer to the bottom. I can't say this is the bottom," said Bill Schultz, chief investment officer at McQueen, Ball & Associates in Bethlehem, Pa. "I think it's more relief, the rally today."

For Wall Street, it came not a moment too soon. The dismal week before wiped out about $2.4 trillion in shareholder wealth. The eight-day losing streak drained 2,400 points from the Dow, or 22 percent - roughly equal to the 1987 crash and enough to establish a bear market all on its own.

U.S. stock market paper gains totaled $1.2 trillion Monday, according to the Dow Jones Wilshire 5000 Composite Index, which represents nearly all stocks traded in America.

The massive rebound also pushed the Nasdaq composite index higher by 195 points, or nearly 12 percent, its second-biggest gain in percentage terms. The Standard and Poor's 500, rose 104 points, its biggest point gain ever and an 11.5 percent gain, its greatest since 1933.

About 3,030 stocks advanced on the New York Stock Exchange, while only about 160 declined - a reversal from last week, when declining stocks overwhelmed the gainers. But the trading volume of 1.82 billion shares was lighter than it had been last week, suggesting there was less conviction in the buying than during last week's selling.

At the close, the Dow stood at 9,387.61. That's still a far cry from its peak of 14,165, set a little more than a year ago - and history suggests Wall Street could have a long climb back to the top of the mountain.

After the Black Monday crash of October 1987, it took the Dow until August 1989 to set a new all-time closing high, almost two years after its previous peak. The 1987 crash took stocks down 36 percent from their pick - comparable to the 40 percent decline in this round of turmoil.

The Bush administration said it was moving quickly to implement its financial rescue package, including consulting with law firms about the mechanics of buying ownership shares in a broad number of banks to help get lending going again.

The $700 billion package, approved by Congress this month, already gives Treasury Secretary Paulson the authority to buy bank stock, which can be done in days - far more quickly than buying up the bank's toxic mortgage loans, which will take weeks, reports Mason.

Neel Kashkari, the assistant Treasury secretary in charge of the program, said Monday officials were also developing guidelines to govern the purchase of soured mortgage-related assets. He gave few details about how the program will actually buy bad assets and bank stock.

And Wall Street still has a lot to worry about, including a housing market that is still groping for a low point in prices and shoppers who are spooked by job losses and other ominous economic signs and are cutting back on their spending.

"I think we had enough negatives last week that if the government steps in we could have a pretty nice run," said Denis Amato, chief investment officer at Ancora Advisors. "Is it off to the races? No, I don't think so. We have a lot of stuff to work through."

It was also too soon to say for sure whether lending was finally loosening up. The sell-off on Wall Street last week was driven by fear that mistrustful banks were choking off the everyday loans that businesses use to buy supplies and pay their workers.

Monday was the Columbus Day holiday, and the U.S. bond markets and banks were closed, making it difficult to gauge the reaction of the credit markets to the measures taken by world governments.

The Bank of England said it would use up to $63 billion to help the three largest British banks strengthen their balance sheets. The Bank of England, the European Central Bank and the Swiss National Bank also jointly announced plans to work together to provide as much short-term money as necessary to help revive lending.

The heads of the five biggest U.S. banks - Goldman Sachs, Morgan Stanley, Citigroup, JPMorgan Chase and Bank of America - were meeting at the Treasury Department with officials from Treasury and the Federal Reserve. The discussions are aimed at finalizing details on the rescue package Congress passed Oct. 3.

That package started with the idea that the government would buy the bad mortgage-related debt off the books of banks. It now includes provisions for the government to buy ownership stakes in banks, among other steps.

It is coming together against the backdrop of a presidential election that has focused squarely on the economy. Sens. Barack Obama and John McCain are to meet for a final debate Wednesday night on Long Island, with the state of the nation's finances sure to be at the top of the list.

[jennings501]

Another week at the financial casino!!
Got to be better than last week..

[wherenextnow]

Stock traders jig with glee as Republican Socialism Free Money becomes available. Remarked one delirious broker, "We can keep playing Monopoly with people''s lives again without consequence - to us!"

Vote Republican. Vote National Socialist.

[melpol1]

The big secret is out. Politicians and the media were hiding the fact that American households have a net worth of over 56 trillion dollars. That is more than half the household wealth of the world. Those statistics come from the Federal reserve Flow of Funds Summary Statistics Second Quarter 2008. If there was a way to get the hoarders of those bucks to go on a long shopping spree the recession in the U.S. would quickly end. But our politicians fear talking to those idle saving account owners and their potential to stimulate our economy, they would rather increase the national debt than anger millions of cheap voters. Consumer spending determines the health of the economy not inflationary government handouts. Until some miserly Americans start digging into their over loaded bank accounts and start spending money our recession will continue indefinitely.

[indivthinker]

Stock traders jig with glee as Republican Socialism Free Money becomes available. Remarked one delirious broker, "We can keep playing Monopoly with people''''s lives again without consequence - to us!"

Vote Republican. Vote National Socialist.

Posted by wherenextnow at 08:34 AM : Oct 13, 2008

Haha, that''s the funniest thing I have heard this week. Good one! You see, the humor comes in the fact that your statement is a lie. The Republicans were not the socialists. They were the ones that killed the bill in the first place. The Democrats were the ones that supported the bailout bill in higher numbers and percentages. Get your facts straight, idiot.

[wherenextnow]

Haha, that''s the funniest thing I have heard this week. Good one! You see, the humor comes in the fact that your statement is a lie. The Republicans were not the socialists. They were the ones that killed the bill in the first place. The Democrats were the ones that supported the bailout bill in higher numbers and percentages. Get your facts straight, idiot.

Posted by indivthinker at 08:50 AM : Oct 13, 2008
------

Sorry for your luck, but when REPUBLICAN Bush has REPUBLICAN Paulson begging on his knees for DEMOCRAT Pelosi to help pass the Socialist Bailout, you have a a delusion issue on your part.

When REPUBLICAN John Boehner gives an angry diatribe and blames Pelosi for sabotaging the Republican Socialist Bailout becuase she gave a speech on the House Floor that caused rebel Republican to actually act like Republicans and vote against the bill, you have a serious lack of credibility.

When you have REPUBLICAN McCain politically stunting his campaign to an early grave and racing to Washington to BEG those rebel Republicans to vote FOR the Republican Socialist Bailout, it makes you look ridiculous.

Sorry.

[wherenextnow]

Vote National Socialist. Vote Republican.

[obsever2008]

The Bank of England, the European Central Bank and Swiss National Bank also said they would provide unlimited U.S. dollars to financial institutions,.........

Why in U.S. dollars? Are we going to pay for them?

[rebelrepubli]

We the People of the Unites States of America (with particular emphasis upon the citizens of Florida) allowed the Republican Party to STEAL the 2000 election thereby placing George W. Bush in POWER. WAKE UP AMERICA!

[oscarez]

"Why in U.S. dollars? Are we going to pay for them?"

Yes. The US dollar cost less than the Euro. Bush is trying to keep the dollar alive. So, we the taxpayer pays the bill and get higher inflation in return.

[newsjunky5]

Bailing out people is socialism. Bailing out banks is corruption.

[lemonskink]

Seems like this multi-billion dollar boondoggle has been forgotten:

http://www.ronnierayjenkins.com/topics/deathinappalachia/Empty_Chairs/

[oscarez]

"American households have a net worth of over 56 trillion dollars"

This is not worth that can be spent. It is houses, cars, boats, air craft, trucks, real estate and 401Ks not cash. Almost 1 trillion alone is owed to credit card companies. The US is drowning in debt and Bush has done nothing but say spend, spend, spend.

[donevis-2009]

The Bank of England, the European Central Bank and Swiss National Bank also said they would provide unlimited U.S. dollars to financial institutions,.........

Why in U.S. dollars? Are we going to pay for them?

Posted by obsever2008 at 09:12 AM : Oct 13, 2008

Yeah they got the dollars and they want to dump them anyway possible. This way they get to look good while doing it. Oh and us, the US tax payers will be paying for them. The big deal is we can''t say anything about it that will be heard because our representatives now turns a deaf ear. We''re not smart enough to know whats best so they do it all without our consent. "God Speed USA"

[donevis-2009]

"Markets up 400 at open"
And now down 100+

Posted by melchg at 09:45 AM : Oct 13, 2008 Oh boy, now the crooks can steal more from us. I''m soooo happy to be scared and broke.

[oscarez]

The stock market is out of control. This is a good time to stay out. Day traders are making the market move up and down with no rime or reason. Every mom and pop that has a Scottraid or Ameritrade account think they are going to get rich day trading.

[oscarez]

As long as Bush is president the markets will continue to move toward "0".

[gop_will_win]

Breaking news! Christian rock groups have gotten together to give a concert and are calling it "Bank Aid"!

[tannerbird]

I GOT it now clear all debt srike new money start over and SPEND,SPEND,SPEND.

[nolalou]

Barack "O"bama has promised that the Capital Gains Tax will go up from the present 15% to possibly 30-40% on Stocks and Bonds bought and sold on the Stock Market today. With the Democrats also in charge of Congress, "O"bama will do it in his first 100 days. Sell-baby-sell and do it now before "O"bama gets in office.

Posted by bellschotsc

Capital Gains taxes do NOT effect most people saving for retirement, since 401K''s are not taxed until you start withdrawing after you retire, and then they are taxed as income, not capital gains. In addition, The IRS reports , most of the gains, about 81 percent %u2014 were claimed by taxpayers making $200,000 a year or more, the top 2.7 percent of tax returns! So this is NOT going to effect the middle class or the average tax payer!

[oscarez]

bellschotsch the same can be said about McCain. The markets are over priced because of speculation on stocks. No stock investments are being made for returns payed for long term ownership such as dividends. Very few companies pay dividends because the investor is hoping to make their money on the increase in the price of their stock not the dividends. The stock market is only reacting to a much bigger problem the world shortage of hard currency.

[vcofreason]

Make sure you take lots of pictures of people using their hands to cover their mouths and expressions of horror. This will change as the day and week goes on. I have a cousin who works on the floor. I told him to use a horrified expression and put his hand to his mouth and he might be on the front of cnn.com. Too funny.

[shimano35]

We fed the rich again when they were hungry, were good to go!!

[oscarez]

"CDs and high earning accounts that are now going to be insured up to $250,000"

Only until 12/31/2009. After this date the accounts will be insured up to $100,000. You have to pay taxes on earnings on the CD and saving and the FED is making sure you don''t make more than 3% to 4% APR on savings so where is the advantage.

[oscarez]

bellschotsch you are full of BS. Your just don''t like Obama.

[donevis-2009]

bellschotsch is a government plant on our blog today. Wish him the best so he crawl back under the rock he came out of. Ignore his posts, maybe he''ll go away back to the WTOP news comment section.

for all ye Obama bashers who say they are going to sell...go right ahead...I''ll be buying up more bargains from ye...dump ''em all bigmouths...market will still go down because ecomonic conditions will futher erode due to you all conservatives that have bankrupted this nation and all the conservative pigs that ran the housing pyramid scheme...still a year away from buying financials since they still have bottomless pits of debt. Buy and cover.

[oscarez]

bellschotsch I have been in business for 30 years and made a lot more money while Clinton was president than under Bush. Sure I have paid less taxes under Bush. I did not get the tax rebate but my business has slowed a lot in the last 8 years. My income is down and I am hoping to hold on until Obama is elected. I cannot vote for McCain because it will be more of Bush. I would be glad to pay more taxes if my income will be what it was under Clinton.

[wardoglrs]

Deep Capture is a work of investigative journalism examining the growing threat to our financial system posed by illegal naked short selling. Links to all sections of Deep Capture are on the right. An explanation of the four main sections appears below.


http://www.deepcapture.com/

[oscarez]

"I can take a vacation for the next four years, earn money in CDs and come back after it and open up my small-business as a HP Business Partner anytime."

bellschotsch this statement makes me think that you have never been in a business successful business.

[martin9p2]

Note that European intervention was required to restore a degree on confidence. That''s because USA''s Financial Superpower status is dead. Do you agree?

[worstever2]

The great bailout, that includes among other gifts, and extension of tax credits to NASCAR track owners.

How can the congressmen,women, the lobbyist, and the track owners even begin to look at themselves in the mirror?

How can they sleep with themselves at night, when the average American is struggling to pay high gas prices, rapidly rising food prices, keep up with their mortgate, while they watch what pitiful 401k savings they have shrink away.

It is time for a revolution of the common man. Maybe we need to rethink the entire structure of our pitiful government from the ground up.

Absolutely disgusting. The worst shape my country has been in during my lifetime.

It all [dems and reps] just makes me sick.

[mimi9991]

It seems that Wall Street harvests their bonus again at the expense of taxpayers'' bailout.

[cybervigilante]

And the greedy bankers, even at this late date, objected to Paulson that they wanted no limits on executive pay and golden parachutes. So you tank your bank, wreck the business, and still insist on a big bonus. They should all be taken out and shot.

[easeup-2009]

I am truly amazed at how people on here think that the stock market only affects rich people, not the average American.

Utter ignorance.

[cybervigilante]

If "O"bama is elected I will possibly close my business, let go the two employee I have and I will not invest back into the market until "O"bama is gone and the Capital Gain Tax is back down and hopeful under 15% again. It''''s not only me but many in the business associations I belong to.

Posted by bellschotsch
======

Well, I hope all you dipwads go broke, then. You elected Bush Twice. The man has killed four thousand of our troops and injured ten times that for NO reason - a war based on lies. He has ruined our status as a decent nation with torture and rendition. He has created the biggest deficit in history, ruined the economy and brought on a near Depression. His Administration is riddled with more graft than Tammany Hall. His idiot-boy Paulson dallied while Rome burned because he had a Politcal aversion to buying bank stock. It''s all politics and ideology, to get re-elected by nutbags like you - so they can throw graft to their rich buddies, like Halliburton. They have NO patriotism. They just want to rape the nation. Like Bush said, "The Constitution is just a piece of paper."

He''s your President - the evil moron-boy - and you sure picked a winner. We don''t need people like you in business or even voting.

[far_point200]

Oh ***, Pelosi is opening her mouth again!

Quick SELL SHORT!

[cybervigilante]

Everyone seems to forget that when capital gains were higher, business prospered, profits grew, the middle class did very well, there was lots of hope, and America was the greatest power in the world with the most powerful industry that actually Made things besides so-called "exotic financial instruments." Now we are slowly becoming second-rate and produce nothing, while the Chinese take our place as industrial producers and the Indians move into tech as we lose ground in education, too. Phooey - the repugs have destroyed America with their short-term greed and total blindness.

[staplesla]

We still have to wait for the fall out from the auto/airline mess, poor holiday retail and travel sales, and the poor earning season.

[easeup-2009]

Now we are slowly becoming second-rate and produce nothing, while the Chinese take our place as industrial producers and the Indians move into tech as we lose ground in education, too. Phooey - the repugs have destroyed America with their short-term greed and total blindness.

Posted by cybervigil at 01:01 PM : Oct 13, 2008

The global economy is a bipartisan concept.

[usgeneral-2009]

.
The the doctor is a quack, the cure is often worse than the disease.

Expect a horrific mess from incompetent government intervention.

/

[sumarongi1]

Got to hand it to our leadership, both political and financial, for shafting us once again. You will notice that now that millions of people have had their lives put into turmoil and millions more have had their lives ruined, that the price of gas has dropped dramatically. They have stolen the goods and are now throwing us a bone to soothe tempers and allow a semblance of normalcy to resurface. To add insult to the injury we''re paying them for their larceny. They caused the mess and are reaping our tax dollars to more than cover the money they lost, which was the investors money, not their own! Talk about a SCAM!!! Their mindset is epitomized by the staff of
AIG! Hey, we just got our first batch of money from the bailout. Let''s go to California to the spa and blow a half-million of it. They could care less.
A large percentage of the mortgages in default would have been far less if the price of gas and heating oil hadn''t driven many household budgets under by tacking several hundred dollars of expense onto already stressed finances. While America was careening down the financial slope at the local level the OIL COMPANIES were merrily posting record profits every quarter and day-traders and speculators were playing the market like a flute.
Curses on all of them. May the Blue Bird of Paradise defecate upon their pates!

[caligola-2009]

So, as I understand all the storm just happened because some 2 - 300,000 irresponsible homeowner stopped paying their mortgage, after they bought a house bigger than they could afford.
NOBODY asked why they stopped paying. Maybe because they lost their job? Or the oil went to $4 a gallon?
Isn''t this something we should inquire about?

[sumarongi1]

Caligola,

Some if not most of those mortgages might have been viable if the oil market and resulting price increases across the board due to increased transportation costs, coupled with the market manipulations of speculators hadn''t added several hundred dollars a month to the households budget.
Lots of those people entered into the mortgages in good faith to own a home. Their budgets just couldn''t handle the overload. Which goes first? The fuel bill? NO! You need it to get to work.
The food bill? Nope, if the kids don''t eat they put you in jail.
The heating or A/C bill? Nope, can''t let them freeze or die of heat prostration.
The electric bill? Nope, they turn it off and your really in the pot.
So guess which bill gets pared to pay all the others?
The mortgage, with hopes they can catch it up. But the price of fuel and everything else keeps going up.

End game - equals a manure heap of misery, woe and violence brought about by corporate America''s GREED!

[missingamerica]

In less then 20 years the Anglo-saxon population will be the minority in the US, so you see you will have a minority president in the US sooner or later!

www.chilitoz.com

Posted by Greta_Hiller at 01:34 PM : Oct 13, 2008

You are correct.

In what I think is one of the more ironic aspects of the impact of Republican policies, the decline in Caucasians is being hastened by the lack of evidence that people will be able to bring children into this world and give them even the lifestyle they themselves enjoyed while growing up.

That it why I cannot help but laugh at how the racists and bigots flock to the Republican Party.

The very people who so fear minorities are, with their policies of "trickle down" economics and "free trade" that benefit only the few, the proud, the elite, acting as birth control.

lolllll....

[staplesla]

It''s just a short bear rally, not a long consistent move up. Remember the treasuries are closed today as well so no bond trading. And we will have the underlying problems still in effect.

I cannot play into your tale of doom and gloom, sorry!! I would rather think that we control our own destiny to some extent....we made it through the ''87 stock market crash, and we''ll get through this....

You just can''t sit around and let events happen and swollow you up...It takes planning...Plan in the good times for the bad times that will ultimately happen...Save some money, pay down your mortgage, do whatever you can to shore up for the bad times....

[easeup-2009]

This short live spike is manipulated by Bush and his corporates in using our tax pay dollars to buy bank stocks, it will die soon down soon.....no help....just manipulative....

Posted by niceface09 at 03:34 PM : Oct 13, 2008

LOL!!!! I love you moonbats who think Bush controls everything!!

[donevis-2009]

It''s a little too hard to believe that the market has magically turned around and gained this much on its own. I feel were being lied to again. What did they do change the way the whole thing is structured? Give the crooks more money to steal while padding the results. Talk about cooked books, whew.

[yeswecan09]

It is good to see a little breathing room with the stock markets!

On a side note: Anyone else notice that the stock market is based on emotions?

[dredre2k]

So now that wall st. is being fixed, when will the congress pass laws to REGULATE Wall St. and the banks?
Oh wait... no need. The bailout worked and everyone''s lending again. Time to go be a "good consumer" and max out my cards for the economy! :-X!