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
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