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

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
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. 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: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. 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 2018 and/or its affiliates.