Dow Shoots Out of Gates Again

The Dow shot above 300 points in the first few moments of trading today and, as of about 10 a.m., is up about 180 points, or more than 2 percent.

The S&P 500 is up nearly 2 percent. The tech-heavy Nasdaq is the laggard in today's early rally, fluctuating above and below water.

Yesterday, the Dow closed up 9 percent, the largest one-day gain in the market's history.

What's the legitimacy of the week's rally so far? On the floor of the New York Stock Exchange, CNBC's Bob Pisani said traders are facing a choice today: Do they continue to go along with the rally and buy all day or do they sell into the rally in the middle of the day?

Let's move away from the spectacle that is Wall Street for a moment and focus on the underlying problem in the current financial crisis: the freezing up of the credit markets.

Because we've gotten used to not trusting any good news until it plays out, we offer a wait-and-see attitude on this piece of data: The three-month LIBOR -- or the London Interbank Overnight Rate, the interest rate banks charge when lending to each other -- is at its lowest rate since March.

The LIBOR had soared because banks did not trust other banks to repay loans.

What does the dropping LIBOR rate mean? It means, like frozen pipes in winter, the ice may be beginning to thaw and a trickle of water is starting to drip from your kitchen faucet.

-- Frank Ahrens

October 14, 2008; 10:02 AM ET  | Category:  business
Previous: The Day the U.S. Economy Changed | Next: Hill Reaction Rolling In to Bank Nationalization


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The plumber still wants paid, so he could care less about a bailout. Maybe they are going to nationalize the plumbers of the world and we'll save money. The local plumber around here can usually be found at the pub when not plumbing. Wall Street got drunk and I guess the plan is to nationalize the pub. They are going to make drinks cheaper like they make everything else cost less. We're going to run our trucks on moonshine too and starve the hogs because we are short on corn. Corn went up and Wall Street stocks went down. It's like the Beverly Hillbillies economy and Mr. Drysdale is nervous about losing Jed's deposits. Things cost what they cost. Where's Miss Jane?

Posted by: Beau James | October 14, 2008 10:18 AM

I'm packing what little I have up and moving. Keep the house. It's looking as worthless as the country. We've been sold out, but McCain and Obama are spending what's left to sell you their plans. I don't care. I have my own plan. I have a morning paper here and I guess that will be gone next as these socialists reinvent our futures with social engineering and financial witchcraft. The Chicago consultants and PR people are doing great. The city is laying off public works people, so it's tough all over. Back to my packing. You guys can have what I don't take with me. I'm keeping my freedom. People died for that.

Posted by: Beau James | October 14, 2008 10:25 AM

Posted by: benq11 | October 14, 2008 12:42 PM

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