Written by OTCPicks.com
Stocks around the world experience biggest one day rally in more than 75 years on Monday as the DOW jumps 936 points or 11.6 percent. Morgan Stanley also jumps 87% after nailing down an agreement from Japan’s Mitsubishi UFJ Financial Groups for a $9B investment for a 21% stake in the company.
The S&P 400 rose 104.13 point to 1,003.35 snapping an eight-day losing streak, it’s longest since 1996 and rebounding from an 18% decline in the last week alone and down some 40% since market highs last October
Goldman Sachs Group Inc. rallied 25 percent today to $111 after dropping 31 percent to $88.80 last week. Bank of America Corp. climbed 9.2 percent, while Citigroup Inc. added 12 percent. Wachovia climbed 13.6 percent after the Federal Reserve approved the $12.46 billion takeover of the U.S. bank by Wells Fargo & Co.
Crude oil gained 4.5 percent to $81.19 a barrel today, rebounding from a 13-month low.
Apple Inc. jumped 14 percent to $110.26, its biggest gain in nine years.
On Monday France, Germany, Spain, the Netherlands and Austria committed 1.3 trillion euros ($1.8 trillion) to guarantee bank loans and take stakes in lenders, racing to prevent the collapse of the financial system.
The announcements came as Britain took majority stakes today in Royal Bank of Scotland Group Plc and HBOS Plc. The coordinated steps followed a pledge yesterday by European leaders to bolster market confidence as the global economy slides toward recession.
The collective European announcements contrast with the European Union’s failure a week ago to agree on Europe-wide measures. Yesterday’s accord left each country free to formulate individual plans to take into account differing legal systems, and so that any eventual bank rescues aren’t held up by the need to get the approval of other EU governments.
The key factor to look at is what happens now to interbank lending rates. This interbank lending is the key to softening the blow of this financial crisis. Yesterday’s accord, combined with the Federal Reserve’s promise today of unlimited dollar funding, helped nudge money- market rates lower. The London interbank offered rate, or Libor, for three-month dollar loans dropped 7 basis points to 4.75 percent today, tied for the largest drop since March 17.
For the past several weeks there has been waning confidence in global financial markets and global banks most recent efforts to ease the credit crunch seem to have been very well received in terms of restoring some degree of confidence in credit markets.
Tomorrow we will see if today’s rebound was a sign of better things to come or a proverbial flash in the pan.
- Morgan Stanley (MS) – Up 86.98%
- Citigroup (C) – Up 11.62%
- Wachovia (WB) – Up 13.59%
- Merrill Lynch (MER) – Up 11.87%
- UBS (UBS) – Up 11.37%
- HSBC (HBC) – Up 8.41%
- Bank of America (BAC) – Up 9.2%
- Wells Fargo (WFC) – Up 7.38%
- Deutsche Bank (DB) – Up 8.49%
- Apple, Inc. (AAPL) – Up 13.46%
- Microsoft (MSFT) – Up 18.6%
- Dell Computer Corp. (DELL) – Up 14.45%
- Cisco Systems (CSCO) – Up 11.84%
- General Motors (GM) – Up 33.13%
- Ford Motors (F) – Up 20.1%