Financials drive Wall St sharply higher
|
|
|
By Cal MankowskiNEW YORK (Reuters) - Stocks rallied on Tuesday ahead of a decision from the Federal Reserve policy meeting expected to conclude with an interest-rate cut of as much as 1 percentage point.Fannie Mae and Freddie Mac rose on expectations that regulators will ease a restriction on capital, enabling them to increase their lending to the weak housing sector.Stronger-than-expected earnings from Goldman Sachs Group Inc's and Lehman Brothers Holdings Inc also drove the financial sector higher. .Subodh Kumar, chief investment strategist at Subodh Kumar &Associates in Toronto, said the market has been encouraged by the Fed's efforts in dealing with the crisis."Perceptions about how involved the Fed is and how successful it will be have changed for the better," he said.The Federal Reserve's policy-setting committee was expected to make its announcement around 2:15 p.m. on Tuesday.The Dow Jones industrial average <.DJI> jumped 256.53 points, or 2.14 percent, to 12,228.78 and the Standard & Poor's 500 Index <.SPX> rose 32.23 points, or 2.60 percent, to 1,309.83. The Nasdaq Composite Index <.IXIC> gained 49.37 points, or 2.27 percent, to 2,226.38.The rebound in financial shares followed a sell-off on Monday after JPMorgan Chase & Co's deal to buy struggling brokerage Bear Stearns at a rock-bottom price.Shares of Fannie Mae climbed 20.2 percent to $26.70 and Freddie Mac rose 18.6 percent to $24.45.Shares of Goldman gained 12 percent to $169.06 while Lehman shot up 33.6 percent at $42.42."The numbers that came out on Goldman Sachs and Lehman, while not great, seem to suggest that there could be light at the end of the tunnel," said Matt Kaufler, portfolio manager and analyst at Clover Capital Management in Rochester, New York.A broker dealer index <.XBD> surged 8.9 percent.On the Nasdaq, Yahoo Inc shares rose 6.8 percent to $27.60 after the Internet search company affirmed its outlook for the first quarter and full year.Interest-rate futures show investors are almost fully pricing in a one percentage-point cut in U.S. short-term rates, which would take the benchmark fed funds rate target down to 2 percent.On Sunday night, the Fed made an emergency quarter-point cut to its discount rate to 3.25 percent and expanded lendingto include brokerages and investment banks, in the first such move since the Great Depression of nearly 80 years ago.Data before the opening on U.S. housing starts was stronger than expected, adding further support to the market.(Editing by Jan Paschal)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
Five more US bank failures bring total for 2009 to 120
New York - Bank failures in the United States have risen to 120 this year as five more regional institutions were added to the list, the US agency that guarantees the safety of bank deposits said. United Commercial Bank in San Francisco with assets o...
US stocks climb slightly despite double-digit jobless rate
New York - US stocks posted mild gains Friday to end the week as investors shrugged off government figures that put the unemployment rate above 10 per cent. The Labour Department said the jobless rate hit 10.2 per cent in the month of October, the hi...
US joblessness hits 10.2 per cent, highest in 26 years - Summary
Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years as another 190,000 people lost their jobs, the Labour Department reported Friday. The figure comes after a 9.8-per-cent jobless rate in September and wa...
US joblessness jumps to 10.2 per cent, highest since 1983 - Update
Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years, as another 190,000 people lost their jobs during the month, the US reported Friday. The figure reported by US Labour Department came after the 9.8 per ...
US jobless rate jumps to 10.2 per cent
Washington - The US unemployment rate surged to 10.2 per cent in October as another 190,000 people lost their jobs, according to US Labour Department figures released Friday. The jobless rate stood at 9.8 per cent in September. Unemployment had been ...
Bulls stop James, edge Cavs - Summary
Los Angeles - The King couldn't deliver in the clutch. Luol Deng and Joakim Noah combined to deny LeBron James a potential game-winning drive in the final seconds as and the visiting Chicago Bulls snapped the Cleveland Cavaliers' three-game winning...
Mortgage lender Fannie Mae posts nearly 19-billion-dollar loss
Washington - US mortgage lender Fannie Mae said Thursday that it would seek 15 billion dollars in federal aid, after posting its ninth consecutive quarterly loss. Fannie Mae reported a net loss of 18.9 billion dollars in the third quarter of 2009, co...
|
|
|
|
|
|
|
|
