WSJ Article by Peter A. McKay and Geooffrey Rogow
Toxic-Asset Plan Rallies Stocks
Markets Race Higher on Long-Awaited Rescue Effort Details
Financials paced a broad market surge Monday after the government explained in greater detail its plan to use private and public funds to take bad credit bets off banks’ hands.
The Dow Jones Industrial Average jumped 497.48 points, or 6.5%, to 7775.86, pushed upward by gains of 25% for J.P. Morgan Chase and 26% for Bank of America. Citigroup rose 20% and American Express rose 19%. Alcoa rose 13% and General Electric gained 9.3%.
The Nasdaq Composite Index surged 98.50 points, or 6.8%, to 1555.77. The S&P 500-stock index leapt 54.38 points, or 7.1%, to 822.92, led by a 16% jump in its financial sector. The energy sector soared 8% as oil futures climbed above $53 a barrel and the industrial sector surged more than 7%.
The Treasury Department said Monday that a new public-private partnership could purchase $1 trillion in soured assets from banks, which would allow them to renew lending. Taxpayers will stand to reap gains — alongside investors such as hedge funds and private-equity firms — if the investments prove profitable.
