Dow Closes Up Nearly 900 Points

Wall Street Rallies Even Amid Dismal Consumer Confidence And Housing Reports

(CBS/AP)  It's been another astounding day on Wall Street, with the Dow Jones industrials soaring nearly 900 points as investors scooped up stocks that were pounded lower in recent sessions.

"We've had some pretty bad news and the consumer confidence was pretty grim this morning," said Doreen Mogavero of Mogavero, Lee & Co. "So I'm amazed it was able to be shaken off as well as it was."

The markets also shrugged off more bad housing numbers which revealed the average price of a home has fallen nearly 18 percent over the past year, reports CBS News business correspondent Anthony Mason.

Most of the move came in the final hour of trading, and the sudden surge lifted blue chip stocks like Walmart, which was up 11 percent, Boeing, up 15 percent and General Motors, up 14 percent.

When the closing bell rang, the Dow had its second biggest point gain ever.

"But we still have to see if it sticks," Mogavero said. "You know we've had so much volatility in these markets the last few weeks. I mean we saw a 900-point move up the other day and we lost that all again. So let's see what happens. I'm not going to put too much stock in today."

That's a widespread sentiment on the street, Mason reports. In other words, beware: it may only be a bear market bounce. The rally added a trillion dollars in value to the Wilshire 5000 index. But it's still down 37 percent for the year. The climb back's going to be a long one.

Analysts said some investors were buying in anticipation that the Federal Reserve will cut its fed funds rate by half a point to 1 percent on Wednesday. Others said the market had just fallen too far, with the Dow having dropped more than 500 points, the previous two trading days.

Still, the day was remarkable because investors brushed off a big drop in consumer confidence reported by the Conference Board.

The Dow is up about 889 points at the 9,065 level. That was its second-largest point gain, coming after the 936 points the Dow jumped on Oct. 13.

The market did pull off its highs after the Conference Board said its index of consumer confidence has fallen to 38 in October, well below the 51 analysts expected. Wall Street is worried that consumers, whose spending drives more than two-thirds of economic growth, will keep pulling back, particularly as the holiday shopping season approaches - but with a litany of bad economic news this month, many investors expected the index to sag.

"The market already reflects a very, very poor outlook. That said, these numbers are coming in way lower than expected," said Jack Ablin, chief investment officer at Harris Private Bank.

A higher open came as home prices tumbled by the sharpest annual rate ever in August, with little indication of a turnaround in sight, a closely watched index showed.

The Standard & Poor's/Case-Shiller 20-city housing index dropped a record 16.6 percent from August last year, the largest drop since its inception in 2000. The 10-city index plunged 17.7 percent, its biggest decline in its 21-year history.

The buying came even as casualties from the global crisis piled up Tuesday: Whirlpool Corp. said it will cut about 5,000 jobs by the end of 2009, Iceland said it needs $6 billion and Germany said Pakistan must secure a loan from the International Monetary Fund within a week.

By holding onto gains, the market seemed to have come to terms with the fact that bad economic news will continue to stream in.

Bond prices were mixed as some investors looked for the safety of government debt. The yield on the three-month Treasury bill, regarded as the safest investment around and an indicator of investor sentiment, fell to 0.75 percent from 0.77 percent Monday. The lower yield indicates an increase in demand. Meanwhile, the yield on the benchmark 10-year Treasury note rose to 3.77 percent from 3.69 percent late Monday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 7 cents to $63.15 a barrel on the New York Mercantile Exchange.

On Monday, the U.S. government said it will start doling out $125 billion to nine major banks this week to get credit flowing again.

Assistant Treasury Secretary David Nason said the deals with the nine banks were signed Sunday, and the government will make the stock purchases this week. The deals are designed to bolster the banks' balance sheets so they will begin more normal lending.

The action will mark the first deployment of resources from the government's $700 billion financial rescue package passed by Congress on Oct. 3.

The bailout package has undergone a major change in emphasis since it was passed by Congress. Treasury Secretary Henry Paulson decided to use $250 billion of the $700 billion to make direct purchases of bank stock, partially nationalizing the country's banking system, as a way to get money into the financial system more quickly.

The plan is also aimed at clearing banks' balance sheets of bad assets. That effort has yet to begin although the administration expects to use $100 billion to purchase bad assets in coming months.

Meanwhile overseas, investors worldwide snapped up stocks after posting huge declines Monday on economic worries. Japan's Nikkei stock average jumped 6.41 percent and Hong Kong's Hang Seng index surged 14.4 percent - its biggest gain in 11 years - a day after plunging more than 12 percent. In afternoon trading, Britain's FTSE 100 rose 2.23 percent, Germany's DAX index jumped 5.49 percent, and France's CAC-40 rose 0.64 percent.

[floydzeppt]

What you are seeing here folks is Market Milking. They are squeezing every ounce of free money they can out of the market. Greed. The sell off, the stock prices drop, they buy back in huge quantities, the prices rises then they sell again to get the profit difference.

Greed.

[longtree-2009]

a one day market come back does not a sustainable market make by any stretch of the imagination. wealthy investors are making tons of money buying low and selling high while everyone else loses their retirement nest egg, their college funds. average americans struggling while the wealthy bathe in luxury and roll around naked in their piles of money. when one has investments of value, one can borrow against them or use them as collateral when making large purchases. though the investment value is not cash in hand, it can be used like cash when borrowed against or used as collateral. but these days only the wealthy are doing well. even warren buffet who is worth billions does not have billions in gold in his personal safe, or a bank''s safe. the very wealthy can take hits on the market and still live in luxury and spend, spend, spend.

[shanev137]

Id'' hate to be trading this chop everyday. Up 900 points, down 900 points, up 900 points. You''d gotta be on some serious meds to handle those swings everyday.

[oneworldusa]

Sell-off tomorrow. People making any money today will be looking to unload early tomorrow, take their earnings and run. Short term investors, mostly.

[janefondu]

LETS BLAME THE MARKET COMEBACK ON BUSH!!

[grandesign]

Even Wayne Huzienga, owner of the Miami Dolphins is putting his team up for sale if obama gets elected because he doesn''t want to pay cap gains.
Posted by jgg0001 at 11:46 PM : Oct 28, 2008

Pay capital gains on a sale of a company? Does he even know what capital gains tax is? It''s the appreciation on a stock''s price from the time it was purchased to the time it is sold. People pay capital gains on appreciated value of a stock, not on the outright sale of a company''s ownership.

[solarrays247-2009]

Even Wayne Huzienga, owner of the Miami Dolphins is putting his team up for sale if obama gets elected because he doesn''''t want to pay cap gains.
Posted by jgg0001 at 11:46 PM : Oct 28, 2008

Great news! Maybe the new owner will build up the Dolphins to be like the team they used to be! Go Dolphins!!!!!

[jgg0001]

News is that Obama is already ahead in the election and McCain may never catch up. Suddenly the market is encouraged.

Posted by rudy654 at 09:04 PM : Oct 28, 2008

right. The markets just love Obama.

Posted by standlee5

actually the market hates obama. every time he widens the gap in the polls, the market sinks. Every time the polls narrow, the market rebounds. If obama gets elected investors aren''t going to pay his capital gains increases. Even Wayne Huzienga, owner of the Miami Dolphins is putting his team up for sale if obama gets elected because he doesn''t want to pay cap gains.

[gotravel1]

www.clintons4mccain.com

Find out why Hillary''s supporters are going for McCain.Learn about the economy that Obama proposes and how it squares with nations around the world at http://windsofchange.thruhere.net

Also learn about Obama''s plan for redistribution at you tube and type in Obama/redistribution bombshell.

These are things you must know before you vote-you won''t here the truth on ABC,CBS or MSN-they''ve abandoned true journalism,so we''re on our own.They''d rather write stories on haircuts and clothes than report news that may actually help the American people be knowledgable.They''d rather insite petty grievances then dig to the truth on substancial issues.

[standlee5]

John McCain did an interview at the opening bell which started the markets rise.

[standlee5]

News is that Obama is already ahead in the election and McCain may never catch up. Suddenly the market is encouraged.

Posted by rudy654 at 09:04 PM : Oct 28, 2008

right. The markets just love Obama.

[txgrouch2007]

Getting back to "where did the money go" when the market drops:

It isn''t money until you sell. While you''re holding shares, the current market is only your OPPORTUNITY to sell.

If you choose to wait, and the market drops, you haven''t lost money. YOU''VE LOST THE OPPORTUNITY you had to sell for the higher price. But it was only an opportunity, not real money. It didn''t go anywhere, it was a missed opportunity.

On the other hand, if circumstances force you to sell in a down market, THEN IT BECOMES A REAL LOSS. That''s when opportunity turns into reality.

[txgrouch2007]

I may be the exception but being able to make 25k in one month has sure changed my mind about the stock market. I know that these kinds of profits won''''t go on endlessly, but its fun while the ride is running.
Posted by steelmonkey5 at 06:54 PM : Oct 28, 2008

WORD TO THE WISE: When your stock investment grows 30% or more in one month SELL!!!!!!

Your grand total of ONE MONTH of experience in the stock market has not made you a grizzled veteran investor. Until you''ve seen your investment DROP MORE THAN THAT IN ONE DAY, you haven''t experienced the stock market yet. :-)

[txgrouch2007]

As in the movie "Toy Story:"

THIS IS THE PART WHERE THE FIRECRACKER EXPLODES AND WE ALL GET BLOWN UP...

[rudy654-2009]

News is that Obama is already ahead in the election and McCain may never catch up. Suddenly the market is encouraged.

[iphyt4u]

Fed chairman Berneke leaks to friends that interest rates will drop tomorrow. Another artificial influence pressuring the stock market just in time for the election. Stock market below 7500, by November 15th.

[mrmazerati]

Maybe it''s because the election is in a week and Obama is ahead.

[ecs1749-2009]

"I may be the exception but being able to make 25k in one month has sure changed my mind about the stock market. I know that these kinds of profits won''''t go on endlessly, but its fun while the ride is running."

Yep. As any gambler can tell you, you will lose 25k faster than you can say PROFIT!

[steelmonkey5]

On October 1, I decided to take a chance on the stock market. I had $75,000 that I had gotten from a settlement on a job lawsuit, that our company had. So it was like extra cash in the bank that I felt like should be used on buying stock. As of today, I had invested 69k in stocks that I had watched bottom out, and picked them to jump. A few haven''t and I sold them, but after today my portfolio, has increased by nearly 25k, with almost 11k of it today! My original 75k has grown to 100.5K. Talk about hitting the jackpot, I never dreamed it could be this good. I had one stock, that increased 197.5%!! I sold the 500 shares I had just bought yesterday, at close today, for a 6.1K profit.

Every one is leery about getting into the stock market, but if one has the time to spend a few hours a day studying the market, and does some research, there is money to be made.

I may be the exception but being able to make 25k in one month has sure changed my mind about the stock market. I know that these kinds of profits won''t go on endlessly, but its fun while the ride is running.

[aaabee-2009]

J.P. Morgan 2008:

That was one of many questions raised by John Olagues, an authority on stock options, in a March 23 [2008] article boldly titled %u201CBear Stearns Buy-out . . . 100% Fraud.%u201D Olagues maintains that the Bear Stearns collapse was artificially created to allow JPMorgan to be paid $55 billion of taxpayer money to cover its own insolvency and acquire its rival Bear Stearns, while at the same time allowing insiders to take large %u201Cshort%u201D positions in Bear Stearns stock and collect massive profits. For evidence, Olagues points to a very suspicious series of events, which will be detailed here after some definitions for anyone not familiar with stock options:

http://www.rgm.com/articles/GlobalRe
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