Stocks Mixed After Treasury Announcement on Banks
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Tuesday, June 9, 2009; 4:23 PM
Stocks posted mixed results today after the Treasury Department announced that 10 large banks would be allowed to repay $68 billion in bailout funds.
The Dow Jones industrial average closed slightly down for the day, off 1.43 points, or 0.02 percent. The index of 30 blue-chip stocks is close to recouping its losses for the year and breaking even for 2009. Meanwhile, the broader Standard & Poor's 500-stock index was up 3.28 points, or 0.35 percent, while the tech-heavy Nasdaq gained 17.73 points, or 0.96 percent.
The Treasury Department did not name the 10 banks that had qualified to repay the money but said that "10 of the largest U.S. financial institutions" were participating in the program. Some banks have sought permission to return the money to avoid restrictions such as limits on executive pay and to show renewed strength.
So far today, BB&T, Capital One, Morgan Stanley and US Bancorp have announced that they are among the banks that received approval to pay back the money they received. Shares of BB&T and Capital One were up about 2.5 percent. But Morgan Stanley and Bancorp were down slightly.
"These repayments are an encouraging sign of financial repair, but we still have work to do," Treasury Secretary Timothy F. Geithner said in a statement.
More than 600 banks have received $199 billion from the bailout program.
Meanwhile, crude oil prices were up 2.8 percent to $69 a barrel on the New York Mercantile Exchange. That helped rally energy stocks, including Chevron, which was up about 1 percent, and ConocoPhillips, which climbed 1.8 percent.
"Crude oil prices are gaining as optimism grows that the global recession is approaching its end, which will spur demand," Jason Kunkel, associate economist for Moody's Economy.com, said in a note this morning.
Overseas stocks were mixed. London's FTSE and the Dax in Germany were up less than 1 percent, while Japan's Nikkei lost 0.8 percent.
