Hope that a significant plan to shore up the banking sector may be around the corner gave investors a reason to dip back into the market today after yesterday’s losses. The blue-chip Dow industrials rebounded 106.41 points, 1.34%, once again regaining the contentious 8,000-point mark. The Nasdaq jumped 2.06% and the S&P 500, a traditional gauge of the entire stock market, gained 1.64%. For more, please read:
New TARP Expected Monday
The new head of the U.S. Treasury, Tim Geithner, said today that an overhaul of the $700 billion Troubled Asset Relief Program (TARP), also known as the “banking bailout,” will be ready by Monday. With pundits across the financial spectrum warning that substantive help for consumers and small businesses must come soon to rescue the economy, investors will parse the details of the new plan with great interest.
Why Buffett Thinks It’s Time To Buy
Warren Buffett’s very public resolution last year to buy stocks raised eyebrows and continues to create controversy given the market’s apparent failure to immediately leap back to record levels. However, when viewed on a scale of decades and the valuation of all stocks compared to all economic activity, Buffett’s bullish logic may make more sense.
Bond Guru Fears “Mini Depression”
Bill Gross, one of the world’s most prominent bond investors, warned today that if the U.S. government doesn’t line up “trillions” of dollars’ worth of stimulus (and not just the mere hundreds of billions currently on the table), the economy could face a “potential catastrophe.” What’s more, he expects the Fed to start buying Treasury debt—but in the face of spiraling government debt, that may not necessarily be a good thing.
Note: This will be the last daily market update until further notice. We are suspending the updates because the market volatility has largely settled. If events merit it in the future, we will resume with the daily commentary. Thank you.