The Independent reported on the Great Depression sweeping the United States, spurred by 4.8% unemployment and a bit of statistical sleight of hand in reporting food-stamp numbers. Wall Street reacted to the news of impending doom and falling skies by rallying almost 400 points in trading. The increase of 3% comes as investors believe that the economy has performed better than analysts first predicted, and that the worst of the housing and lending crises has passed:
Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks, optimistic that the worst of the credit crisis has passed and that the economy is faring better than expected. The Dow Jones industrials surged nearly 400 points, and all the major indexes were up more than 3 percent.
Financial stocks were among the big winners after Lehman Brothers Holdings Inc. and Switzerland’s UBS AG issued new shares to help bolster their balance sheets. With that upbeat news and a fresh quarter ahead of them, investors appear quite willing to make some bets that the worst of the damage from America’s credit struggles has been felt. Moreover, the banks’ moves buttressed the view that financial services companies are taking aggressive action to improve their capital bases and stave off the potential of a collapse similar to Bear Stearns Cos.
Investors left their shelters to start taking risks again. Treasury bonds fell, as did gold, as people re-entered the stock market. Financials rose across the board, even Bear Stearns, which went above its acquisition price.
No word was given on futures for The Independent.
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