Stocks posted among their best one day gain today, on word that the government is putting together a plan to buy stakes in some banks, as a way of help instilling confidence again into the banking system.
This follows a similar but more concentrated U.K. government plan to buy equity stakes to the tune of $37 billion, in Royal Bank of Scotland in which it will take a more than 50% stake, and Lloyds TSB and HBOS which are in the process of merging. The U.K government will take a 40% stake in the combined Lloyds TSB and HBOS. European Union central bankers also announced similar plans to inject capital into their banking systems.
The Dow Jones industrial average was up 936 points (11.08%) finishing the day at 936.42. This was the largest point gain ever for the Dow and the fourth largest percentage gain.
The Nasdaq was up 194.74 for 11.81%, closing at 1,844.25 and the S&P 500 closed at 1,003.35 or 11.58%, for a gain of 104.13. This was the largest point gain ever for the index, and the largest percentage gain since 1933.
Stocks were also up on news that Morgan Stanley (MS) closed its deal with Mitsubishi UFJ Financial (MTU), in which Mitsubishi (MTU) took a 21% stake in Morgan Stanley (MS). Wall Street was worried the deal might not go through, after Morgan Stanley’s stock fell over 60% since the deal was first announced on September 22nd, 2008.
