Yay, bailouts! The markets rose this morning on news of China’s massive stimulus package and AIG’s second bailout. Unfortunately, the rally seems to have cooled since then.
AP: Wall Street rose in early trading Monday, boosted by China’s $586 billion stimulus package, a move that investors believe will help ease the global economic downturn.
The advance follows a rally in Asia and Europe after China announced plans to boost its economy through a mix of spending, subsidies, looser credit policies and tax cuts. The package was seen as a benefit to multinational companies such as General Electric Co. and Caterpillar Inc.
Also boosting U.S. markets, the government on Monday provided new financial assistance to troubled insurance giant American International Group Inc., including pouring $40 billion into the company in return for partial ownership. The action was announced jointly by the Federal Reserve and the Treasury Department…
The Dow Jones industrial average rose 141.38, or 1.58 per cent, to 9,085.19.
Broader indexes also surged. The Standard & Poor’s 500 index jumped 12.78, or 1.37 per cent, to 943.77; and the Nasdaq composite index rose 15.61, or 0.95 per cent, to 1,663.01…
With stocks higher, investors moved out of the relative safety of government bonds. The three-month Treasury bill’s yield rose to 0.32 per cent from 0.28 per cent late Friday. A higher yield indicates less demand. The yield on the benchmark 10-year Treasury note rose to 3.81 per cent from 3.79 per cent late Friday.
Oil prices jumped above $63 a barrel Monday in Asia as regional stock markets rallied on China’s economic stimulus plan, which could underpin demand for crude. A barrel of light sweet crude rose $3.10 to $64.14 on the New York Mercantile Exchange.
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