Tuesday: A Wary Look Ahead
The Dow soared some 700 points over last Thursday and Friday. Today, it lost half of that. What will Tuesday bring on Wall Street?
Last week's stock surge was caused by the news that the federal government would proceed with a bailout, poised to buy some $700 billion in bank mortgage debt.
The good feelings lasted all weekend.
By yesterday morning, Wall Street realized such a plan would probably come with some details, which hadn't yet been worked out, such as how much regulation lawmakers would slap on Wall Street and the Treasury, who would oversee the whole shebang and so forth.
Further, Wall Street is uncertain exactly how much the bailout will unfreeze the credit markets, their lifeblood.
Toss in the rest of today's roiling -- Mitsubishi buying into Morgan Stanley, for instance -- and uncertainty ruled the day.
Uncertainty usually leads to sell-offs, and that's what happened.
Tomorrow, we shall see if Wall Street feels any surer of itself or if it remains as skittish as a cat in a room full of rocking chairs, as they used to say down South (and may still).
Also on tap tomorrow:
A living Mount Rushmore of government financial heavy-hitters sits down in front of the Senate Banking committee at 9:30 a.m. in Dirksen G-50 to discuss the bailout. Scheduled to appear before Sen. Chris Dodd's (D-Conn.) committee are:
- Treasury Secretary Henry Paulson
- Fed Chairman Ben Bernanke
- SEC Chairman Christopher Cox
- Federal Housing Finance Agency Director James Lockhart III.
And don't forget two things:
A) Keep checking back here throughout the day for up-to-the-minute news affecting you, your 401(k) and your peace of mind.
B) We are looking for reader questions for our daily Q & A about how the crisis affects your personal finances. Submit your questions here.
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