Wall Street cheers banks' move

Stocks jump after Fed and other central banks inject cash into markets roiled by financial crisis.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Aaron Smith, CNNMoney.com staff writer

Which candidate would be the best leader in a bad economy?
  • John McCain
  • Barack Obama

NEW YORK (CNNMoney.com) -- Stocks rallied Thursday morning as investors breathed a sigh of relief that central banks around the world have acted to calm markets shaken by the financial crisis.

The Dow Jones industrial average (INDU) gained 150 points, or 1.4% in the early going. The Standard & Poor's 500 (SPX) index added 1.6% and the Nasdaq composite (COMP) climbed over 2%.

Wall Street is coming off a dismal day in which the Dow Jones industrial average plunged 449 points and closed at its lowest point since November 2005. The S&P 500 and the Nasdaq composite both plummeted nearly 5% and closed at multi-year lows as well.

Early Thursday, the Federal Reserve and other central banks around the world announced that they would inject money into the markets in an effort to calm them. Joining the Fed were the European Central Bank, the Swiss National Bank, the Bank of England, the Bank of Canada and the Bank of Japan.

Also influencing markets, oil prices and weekly jobless claims both increased.

Financial crisis: The move comes in the wake of one of the most severe financial crises in history. So far this week, the Federal Reserve announced a takeover of the troubled insurance American International Group (AIG, Fortune 500) in the form of an $85 billion loan, but didn't step in for Lehman Brothers (LEH, Fortune 500), which filed for bankruptcy. In addition, Bank of America (BAC, Fortune 500) agreed to acquire Merrill Lynch (MER, Fortune 500) for $50 billion.

Those actions have left other banks and investment houses quaking. Morgan Stanley (MS, Fortune 500) and Goldman Sachs (GS, Fortune 500) fell sharply Wednesday, and there was talk after the close of possible merger talks between Morgan Stanley and Wachovia (WB, Fortune 500). (Full story)

There was also talk that troubled savings and loan Washington Mutual (WM, Fortune 500) has put itself up for sale.

Economy: The Labor Department announced 455,000 initial jobless claims for the week ended Sept. 13. This was more than the 440,000 claims that were expected by a consensus of economists surveyed by Briefing.com, and the 445,000 claims filed in the prior week.

At 10 a.m. ET, the Conference Board will announce the leading economic indicators for August, a broad measurement of economic growth or decline. A consensus of economists from Briefing.com expects a decline of 0.2%, compared to the July decline of 0.7%.

At the same time, the Philadelphia Federal Reserve Bank will reveal its regional manufacturing survey for September. Briefing.com's consensus of economists projects a slight improvement to negative 10 from negative 12.7 in August.

Markets, currency, oil: European markets were up, but Asian markets closed down. The U.S. dollar fell versus the euro and the British pound, but rose against the yen. Oil made a comeback, rising $2.41 a barrel to $99.57 and spiking as high as $102.24, as some investors eschewed stocks and dumped their money into commodities. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
'My biggest retirement mistake' Five CNNMoney readers share stories about saving that you can learn from. What they would do differently if they had another chance. More
Inside a $60,000 vacation of a lifetime Private jet tours around the world are growing in popularity, with a number of companies cropping up to take travelers on luxe, bucket-list trips. Here's a look at one 17-day journey, run by TCS Expeditions, that will take 78 people to some of the most lusted-over destinations. The price: $60,000 per couple. More
Don't want a bigger iPhone? Here are 6 alternatives Apple's next-generation iPhones are set to be the largest ever. But for those of us who don't want to give up any more space in our pockets, here are a few smaller options. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.