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