Another Wild Day on Wall Street?
How strange have the times become? A 500-point rally by the Dow brings it back to being down only 349 points. That's how strange.
It makes sense for regular folks who have 401(k)s to have rooted for yesterday's afternoon rally, hoping that the Dow would get back to at least even on the day, but that may not have been the healthiest action in the long run for the markets.
At close yesterday, some analysts were rooting for the Dow to finish down 700 or 800 points creating what they called a "flush" -- getting all the sellers out of the system and allowing the market to hit a bottom. Then, today opening with a real rally. So analysts worried yesterday the bottom had not been touched yet.
So we'll see here in a bit when the markets open.
Meanwhile, here's the news happening today:
- The Post's Neil Irwin reports that Federal Reserve this morning announced a new program through which it will buy up commercial paper, the short term debt that large companies around the country use to fund their day-to-day operations. That puts the Fed in the unprecedented position of, in effect, funding individual companies by buying up their debt.
The "Commercial Paper Funding Facility" will be a special entity, funded by both the Fed and the Treasury Department, that will purchase three-month commercial paper. It will include both debt that isn't backed by specific assets and that which is "unsecured," or backed only by the company that issues it. Entities that sell unsecured debt to the new entity will have to pay a fee to account for the risk they present.
- Fed Chairman Ben Bernanke will speak to a group of economists at 1:15 p.m. today. Neil will be on it.
- Fresh off flogging the former Lehman Bros. chief executive yesterday, Rep. Henry Waxman (D-Calif.) takes on insurance giant AIG today at 10 a.m.
-- Frank Ahrens
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Posted by: Anonymous | October 7, 2008 9:45 AM
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