The Dow Jones average was up 417 points today. You know, because the US economy is doing so well, jobs are popping up everywhere and everything financial is coming up Roses!
OOP’s. My bad. Here is the real reason.
Here is the Headline and some input from CNNMoney:
Stocks surge with the Dow soaring 417 points as investors cheer reports that the central bank is pumping an additional $200 billion into the banking system.
Stocks rallied Tuesday as investors welcomed news that the Federal Reserve will lend up to $200 billion to banks and lenders as a means of loosening up tight credit markets.
According to early tallies, the Dow Jones industrial average (INDU) jumped almost 417 points, its fourth-biggest one-day point gain ever and the biggest one-day point gain since July 2002. In percentage terms, the gain of 3.55% was the best since March 2003.
The blue-chip index had ended the previous session at a 17-month low.
The broader Standard & Poor’s 500 (SPX) index climbed 3.7% after ending the previous session at a 19-month low. It was the biggest one-day percentage gain since May 2002.
What does this mean to you, American citizen? Well, it means that the Federal Reserve is going to have to print more money in order to bail out the companies that, not unlike a Las Vegas gambler, placed all their money on number 18 on the Roulette wheel and the wheel stopped on 24. Close, but a loser.
The Fed will make up to $200 billion available to a group of 20 big investment firms for a term of 28 days, rather than overnight. The program is being coordinated with central banks worldwide.