Mar 11, 2008 7:43 pm US/Eastern
Dow Up 416 Points After Fed Credit Move
NEW YORK (AP) ―
Wall Street finally found a reason for a huge rally Tuesday, after the Federal Reserve said it plans to pump $200 billion into the financial markets to help ease the strain from the credit crisis. The Dow Jones industrial average shot up more than 416 points, its biggest one-day point gain since July 24, 2002.
The Fed's program is part of a worldwide effort to help struggling banks and mortgage providers. The Fed — acting in concert with the European Central Bank, the Bank of Canada and the Swiss National Bank — agreed to loan investment banks money in exchange for debt, including slumping mortgage-backed securities.
The move is meant to essentially create a market for assets that investors have been too scared to buy. That freeze-up in demand had sent asset values plunging and caused huge losses for some of the world's biggest banks.
According to preliminary calculations, the Dow rose 416.66, or 3.55 percent, to 12,156.81. The index — which lost more than 500 points in the last three sessions — is still down about 2,000 points from its October 2007 record high.
Broader stock indicators also soared. The Standard & Poor's 500 index rose 47.28, or 3.71 percent, to 1,320.65, while the Nasdaq composite index surged 86.42, or 3.98 percent, to 2,255.76.
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