Banks Rally, Fed Injects Cash, Rates Steady
A massively volatile day starting with a pre open sell off leading to a steeper decent triggered by the Fed decision not to lower rates. However, the market focused on a bank lead rally and market positive Fed sentiment launching into a strong rally ending sharply higher. The DJIA rose +141.59 to 11059.10, the Nasdaq added +22.45 to 2202.36 and the broad based S&P 500 index jumped +20.89 to 1213.59. The Federal Reserve injected $70 billion into the financial system today to absorb credit issues, apparently triggering a rally in the banking sector.
American International Group
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PowerRating) – The Fed shocked the market today by potentially changing its decision not to help the world’s largest insurer. The reversal pared the losses pushing price into positive territory briefly but the stock still ended down 17.02% or $0.81 to $3.95/share.
US Airways
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PowerRating) – Soared up 16.07% or $1.26 to $9.10/share. All airlines benefited today from steep decline in oil prices.
Best Buy
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PowerRating) did not participate in the rally today, falling 2.97% or $1.30 to $42.40/share after a 19% drop in profits.
Wells Fargo
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PowerRating) climbed 12.68% or $3.93 to $34.93/share after Credit Suisse suggested that Lehman Brothers will have little effect on the bank.
Oil dipped another $3.14 to $92.57/barrel, Gold fell $5.80 to $781.20 and the VIX fear index climbed to the highest level in 5 years prior to settling back at 30.30.
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