Wall Street enjoyed its best trading day in more than five years on Tuesday — complete with a 400-point gain in the Dow Jones industrial average — after the Federal Reserve injected a burst of financial adrenaline into the ailing banking system. The Dow finished up 416.66 points, near its high for the day, for a one-day gain of 3.6 percent, to 12,156.81, snapping a three-day losing streak. It was the biggest one-day point gain for the Dow since July 29, 2002. The Standard & Poor’s 500-stock index was up 3.7 percent, and the technology-heavy Nasdaq composite index gained 4 percent.
For weeks, investors have been concerned about a freeze-up in the credit markets, as banks cowed by round after round of multibillion-dollar write-offs became increasingly panicky about lending to businesses and consumers.
On Tuesday, the Fed announced it would offer up to $200 billion in ultra-safe Treasury securities to the nation’s banks, including several major brokerage firms, in exchange for a variety of collateral options — including the very mortgage-backed securities that have caused the recent financial crisis. Click here for full story.
Chances are if you own tech or web stocks, you did alright today. You probably showed moderate increases in your portfolio upon the release of $200 billion relief package. Still, one day of upside movement does not mean this whole ordeal is over yet. Don't go spending all your bread thinking the dollar is back! Play smart, not hard.
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