Rescue helps rally Wall Street

November 25, 2008|By From Sun news services

The government's plan to bail out Citigroup sent Wall Street soaring yesterday for the second straight session as investors hoped that the worst of the financial industry's problems might finally be over. The Dow Jones industrials surged nearly 400 points, and all the major indexes jumped more than 4.5 percent.

The rally gave the market its first two-day advance in three weeks and the Dow its biggest two-day percentage gain since October 1987, the month of the Black Monday crash.

The Dow's 891-point climb over the two sessions also wiped out the 872-point plunge it suffered Wednesday and Thursday, when investors were anguished over the fate of Citigroup Inc. and financial companies in general, and the future of the nation's automakers.

Although investors sensed late last week that a rescue of Citigroup was forthcoming, they nonetheless were heartened, even emboldened, by the U.S. government's decision late Sunday to invest $20 billion in the company and guarantee $306 billion in risky assets.

Still, the market remained wary, especially with the economy in a serious downturn. The Dow was up more than 500 points in the last hour before giving up some of its gains. Many investors wanted to take some money off the table before any bad news arrived. And the market has frequently done sharp reversals since the start of the credit crisis 15 months ago.

The Dow rose 396.97 points, or 4.9 percent, to 8,443.39. It's risen 891 points, or 11.8 percent, in the past two sessions.

The Standard & Poor's 500 index climbed 51.78 points, or 6.5 percent, to 851.81. It's up 13.2 percent in the past two trading sessions.

The Nasdaq composite index advanced 87.67 points, or 6.3 percent, to 1,472.02 points.

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