Dow UP almost 500 pts on Bank Plan and Home Sales
The US markets killed it today with the Dow up 6.84%, the Nasdaq up 6.76% and the S&P 500 up a whopping 7.08%. This marks the second week in which the US markets have made considerable (understatement) gains.
The two biggest problems currently plaguing our economy (failed banks and home sales) got great news today which hurled the markets into a positive frenzy for most of the trading day.
It appears that the much debated plan to inject banks with more of the tax payers money in attempt to cure their shaky assets was applauded and confirmed by Wall Street to be a positive move.
This positive turn around in the markets in general over the last few trading days is largely due to positive news from the banking industry. Remember, two weeks ago Citigroup Inc announced they were operating at a profit in both January and February.
Congrats to those who took a stab at buying shares in these major banks over the last few weeks!
Big Gains for the Big Banks:
Citigroup - Up 19.50%
Bank of America Corp - Up 26.0%
JPMorgan Chase - Up 25.0%
Wells Fargo - Up 24%
My question to you is, how do you think this will affect the savings products offered by these banks? Do you see CD rates and savings accounts yielding higher rates, relatively similar rates, or lower rates?
March 23rd, 2009 at 3:41 pm
FINALLY!!!!!!!!!!!!!!!
March 23rd, 2009 at 8:10 pm
This may be good news in the short-term, but for the long-term what has changed. These bail-outs and programs are basically sweeping the dirt under the rug and trying to pretend nothing ever happened.
With the Fed buying up long-term debt and driving bond yields down, CD rates will probably follow. However, at some point, the piper will need to be paid and inflation will be back with a vengeance.