Monday, Oct. 13 - Markets roar
On Monday Oct. 13, the Dow soared after European Union leaders agreed to bail out troubled financial institutions over the weekend, and the Treasury Department detailed its strategy for the $700 billion rescue plan.
The index jumped by 976 points, its largest single-day point gain in history, effectively boosting the market's value by $1.2 trillion, according to the ultra-broad Dow Jones Wilshire 5000 index.
Investors bought stocks frantically after the Treasury Department detailed a five-pronged attack on the financial crisis.
According to the plan, the government will:
· Buy troubled mortgage-backed securities
· Buy mortgages, particularly from regional banks
· Insure mortgage-backed securities and mortgages, ensuring banks, making sure investors don't lose money if borrowers default
· Buy equity in a broad array of financial institutions
· Help delinquent borrowers stay in their homes.
Also on Monday, the Federal Reserve said it would offer an unlimited amount of dollars to the central banks of England, Switzerland and the European Union at a fixed interest rate.
In Europe, the British Treasury said it would pump $63 billion into the Royal Bank of Scotland, HBOS, and Lloyds. Germany, France and Spain took similar measures.
Meanwhile Congressional Democrats continued to discuss plans for a second stimulus package. House Speaker Nancy Pelosi, D-Calif., said such a package could cost about $150 billion.
NEXT: Tuesday, Oct. 14 - Direct injections
The index jumped by 976 points, its largest single-day point gain in history, effectively boosting the market's value by $1.2 trillion, according to the ultra-broad Dow Jones Wilshire 5000 index.
Investors bought stocks frantically after the Treasury Department detailed a five-pronged attack on the financial crisis.
According to the plan, the government will:
· Buy troubled mortgage-backed securities
· Buy mortgages, particularly from regional banks
· Insure mortgage-backed securities and mortgages, ensuring banks, making sure investors don't lose money if borrowers default
· Buy equity in a broad array of financial institutions
· Help delinquent borrowers stay in their homes.
Also on Monday, the Federal Reserve said it would offer an unlimited amount of dollars to the central banks of England, Switzerland and the European Union at a fixed interest rate.
In Europe, the British Treasury said it would pump $63 billion into the Royal Bank of Scotland, HBOS, and Lloyds. Germany, France and Spain took similar measures.
Meanwhile Congressional Democrats continued to discuss plans for a second stimulus package. House Speaker Nancy Pelosi, D-Calif., said such a package could cost about $150 billion.
NEXT: Tuesday, Oct. 14 - Direct injections
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