The Dow Jones industrial average jumped 889.35 points, or 10.88%, to 9,065.12. The Standard & Poor's 500 Index surged 91.59 points, or 10.79%, to 940.51. The Nasdaq Composite Index ran up 143.57 points, or 9.53%, to 1,649.47.
on the floor of the New York Stock Exchange October 28, 2008.
Reuters/Brendan McDermid
It was the second-biggest point gain ever for the Dow and the S&P. These advances were surpassed only by the rally on October 13, when the Dow jumped 936.42 points and the S&P 500 climbed 104.13 points after governments pledged to pour cash into struggling banks and a Japanese banking group completed its investment in Morgan Stanley.
The rally came despite an economic picture that remained gloomy after data showed U.S. consumer confidence tumbled to a record low in October as the financial crisis made Americans anxious about their jobs and pessimistic about the future.
Recent price drops attracted buying by bottom fishing because peoples don't want to miss the bottom, with all 30 components of the Dow Jones Industrial Average advancing, allowing the index to recoup the 500 points it lost over the past two sessions plus some. The broader market reflected gains by energy, utility, industrial and materials companies.
Equities around the world tumbled this month, wiping out more than $12 trillion of market value before today, after money markets froze, banks' credit losses climbed to almost $678 billion and economic growth weakened.
The Fed began buying commercial paper from companies yesterday to reduce rates, lure back investors and unlock the market, which seized up last month following the bankruptcy of Lehman Brothers Holdings Inc. General Electric Co., which sold debt to the Fed yesterday, Korea Development Bank and Morgan Stanley are among several dozen companies that have signed up for the program, which was announced on Oct. 7.
Companies yesterday sold 1,511 issues totaling a record $67.1 billion of the debt due in more than 80 days, compared with a daily average of 340 issues valued at $6.7 billion last week, according to Fed data. The central bank probably absorbed about $60 billion of the total.
Extremely low $TRIN readings
From Cobra:
- One of my friends pointed out today that $TRIN reading was ridiculously low. So what does this mean. Check the following chart. Compare the low with the green curve on the background which represents $SPX. Seems to me the extremely low readings of $TRIN always associate with the market bottom.
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- Bloomberg: Fed Spurs Record Surge in Longer-Term Commercial Paper Issuance, October 28, 2008 18:17 EDT
- Bloomberg: U.S. Stocks Rally, Dow Jones Industrials Climb 889 Points , October 28, 2008 18:45 EDT
- Reuters: Wall Street scores 2nd-best day ever on rate-cut hopes, Tue Oct 28, 2008 08:35 pm EDT
- Business Week: Dow Jumps 889 Points on Bargain Hunting, October 28, 2008 04:25PM EST
- Cobra's Market View: Extremely low $TRIN readings, October 28, 2008
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