Stocks Get a ‘Kick-Start’ From Fed’s Announcement
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Stocks in America rallied the most in five years after the Federal Reserve said it will pump $200 billion into the financial system to shore up banks battered by mortgage- related losses.
Citigroup Inc., Bank of America Corp., and Fannie Mae led the Standard & Poor’s 500 Financials Index to its biggest gain in eight years on expectations the Fed’s move will spur lending. Washington Mutual Inc. climbed the most since 2000 on speculation the largest savings and loan will get a cash infusion from an outside investor. All 10 industry groups in the S&P 500 rose except for health-care companies, which fell after WellPoint Inc. cut its earnings forecast.
The S&P 500 added 47.28 points, or 3.7%, to 1,320.65, climbing the most since October 2002 and trimming its decline for the year to 10%. The Dow Jones Industrial Average surged 416.66, or 3.6%, to 12,156.81. The Nasdaq Composite Index increased 86.42, or 4%, to 2,255.76. Almost 11 stocks gained for every one that fell on the New York Stock Exchange.
“It’s like they’re putting jumper cables onto a battery to kick-start the credit market,” a manager of $34 billion at National City Private Client Group in Cleveland, Nick Raich, said. “They’re doing their best to try to restore confidence.”
