Markets Surge to Biggest One-Day Gain Since Great Depression
Tuesday, October 14, 2008
NEW YORK, Oct. 13 -- Wall Street shrugged off its worst week ever and staged the biggest single-day rally since the Great Depression, catapulting the Dow Jones industrial average to a record 936-point gain and offering relief from eight consecutive days of heavy losses. U.S. stock market paper gains totaled $1.2 trillion Monday, according to the Dow Jones Wilshire 5000 composite index, which represents nearly all stocks traded in the United States.
The Dow rose 936.42, or 11.1 percent, to close at 9387.61 -- still a far cry from its peak of 14,165 set a little more than a year ago. It was the blue chips' biggest one-day percentage gain since 1933. The Standard and Poor's 500-stock index rose 104.13 points, its biggest point gain ever and an 11.6 percent increase, to 1003.35 The Nasdaq composite index rose 194.74 points, or 11.8 percent, its second-biggest percentage gain ever, to 1844.25.
Stocks opened sharply higher and never turned back. The Dow was up more than 400 points in the opening minutes of trading and by the lunch hour had risen above the 9000 level it fell below last week.
The rally intensified in the final hour of trading. In the moments before the closing bell rang, some traders sounded horns on the floor of the New York Stock Exchange, and applause broke out.
The surge came as executives from leading banks were summoned to Washington by the Bush administration to work out a plan to get loans moving again. It also followed signals that European governments would put nearly $2 trillion on the line to protect banks there.
The Bush administration said it was moving quickly to implement its financial rescue package, including consulting with law firms about the mechanics of buying ownership shares in a broad number of banks to help get lending going.
Monday was the Columbus Day holiday, and the U.S. bond markets and banks were closed, making it difficult to gauge the reaction of the credit markets to the measures taken by world governments.
Morgan Stanley rose $8.42, to $18.10, after closing a deal for a $9 billion cash infusion.
General Motors gained $1.62, to $6.51, as investors reacted to reports that the automaker had been considering merging with a competitor.