Bulls keep running

U.S. stocks surge Tuesday morning as Bush unveils bank recapitalization plan

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 Catherine Tymkiw, CNNMoney.com producer

Will the U.S. lose its position as the world's financial superpower?
  • Yes
  • No
Will the U.S. lose its financial superpower status?
Have your say

NEW YORK (CNNMoney.com) -- Stocks surged Tuesday morning, adding to the prior session's historic rally, as investors cheered the Bush administration's plan to recapitalize major banks.

The Dow Jones industrial average (INDU) jumped 363 points in the early going. The Standard & Poor's 500 (SPX) index added 3.9% and the Nasdaq composite (COMP) gained 2%.

Stocks surged Monday, with the Dow industrials soaring some 936 points, or 11%, marking the largest-ever point advance for the blue-chip index. The S&P 500 and Nasdaq also hit point-gain records.

Investors reacted to global efforts over the weekend and into Monday aimed at unfreezing credit markets and getting money flowing through the pipelines.

Treasury trading resumed following the Columbus Day holiday, and could give a good indication of whether all the recent interventions are working.

On Tuesday, the Bush administration announced plans to recapitalize U.S. banks in an effort to end the credit freeze that has slammed the global economy. Among the moves announced: a $250 billion investment in nine major banks and a plan for the the Federal Deposit Insurance Corp. will back up new senior bank debt for three years.

"These efforts are designed to directly benefit the American people by stabilizing our overall financial system and helping our economy recover," President Bush said in a statement outside the White House.

Overseas markets extended their celebration, with Japan's Nikkei surging to a single-day record gain of 14.2%.

European markets rallied for the second straight day. London's FTSE-100 was up 5.5% in afternoon trading, while Frankfurt's DAX and Paris' CAC-40 climbed by 5%.

Numbers: Soft drink maker PepsiCo (PEP, Fortune 500) reported weaker-than-expected third-quarter earnings and said it would cut 3,300 jobs due to the global economic slowdown. Pepsi shares fell 3.8% in premarket trading.

Dow component Johnson & Johnson (JNJ, Fortune 500) reported higher third-quarter earnings that beat expectations. J&J shares rose 5% in premarket trading.

Dollar and oil. The dollar remained under pressure early Tuesday. The greenback was down against the 15-nation euro and the British pound, but was up slightly against the Japanese yen.

Crude prices, meanwhile, stepped higher. Prices, which have plunged some 43% from the record $147.27 a barrel set on July 11, were up $2.01 to $83.21 a barrel early Tuesday.

Oil prices have been under pressure amid worries that the global crisis would undercut demand. Late last week, OPEC announced it would hold an emergency meeting Nov. 18 to address the issue. 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
6 products to keep the skies friendly Plane travel can be stressful, especially during the holidays. These things can help keep the peace among travelers. More
2014: Helluva good year for stocks The bull market has been going for 2,115 days. If you put you're money in stocks, it's been a very happy year. More
7 up-and-coming foodie destinations These seven cities are seeing a growing interest in local food boost the economy -- and produce some seriously tasty eats. More

Most stock quote data provided by BATS. Market indices 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.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.