New York Times: “Wall Street Shows Optimism That Crisis Is Fading”
April 2nd, 2008Can UBS and Merrill Lynch customers get their money yet?
No.
Via: New York Times:
Stocks started the second quarter with a soaring rally on Tuesday that sent the Dow Jones industrial average up nearly 400 points, its best performance in two weeks, as investors found reasons to take heart in a fresh round of mortgage-related write-offs at UBS and Deutsche Bank and a capital infusion at Lehman Brothers, the brokerage firm.
The Standard & Poor’s 500-stock index gained 3.6 percent on the strength of a surge in shares of financial services firms. Lehman Brothers, the bond insurer MBIA and the mortgage giant Fannie Mae were among the index’s biggest gainers.
Asian stocks, also led by banks, advanced in early trading Wednesday.
Despite the discouraging numbers — $19 billion in write-downs at UBS and nearly $4 billion at Deutsche Bank in the first quarter alone — investors appeared hopeful that the bad news could signal the last of Wall Street’s credit woes.
“UBS was providing transparency to the market,” said Ryan Larson, a Voyageur Asset Management trader. “That’s something we’ve desperately needed in the face of this current crisis.”
Adding to the good feelings, Lehman said private investors had snapped up a $4 billion offering of preferred stock — far more than expected — in a move to dispel a swirl of rumors about its stability. Shares of Lehman jumped 17 percent. UBS said it would try a similar move with $15 billion in additional funds; its shares rose 15 percent.
Analysts pointed to the successful Lehman offering as a sign that the actions of the Federal Reserve had restored some confidence among banks.
“Lehman demonstrated that not only could they raise the capital at a reasonable cost, but that the Fed really had succeeded at stabilizing the financial system,” said Ed Yardeni, the investment strategist. “Lehman was an important test of that.”
Treasury yields rose and the dollar advanced against the euro, signs of increased confidence among investors that Wall Street will weather the credit crisis.
I can understand why they wished to avoid running this “news story” the previous day. 😉
Loveandlight,
Yes, this would NOT be a story you’d want to run on April Fools day, would it?
Investors will always hope!
One of these days, hopefully not soon, well just imagine all electronic wealth wiped out in a well, call it a whoosh. Everything around you would be the same, just no more electronic funny money. ZAP. A big sunspot just came and rained on the whole world’s electronic parade.
What would that do to your psyche and spirit?
Hopefully. Nuthin.
Maybe free you up for some real fun.
Drinkin beer, wine, heh.
I’m liking the idea of it already.