Leapleaf Investing Blog

U.S. stocks ended mixed Friday after the Bush administration’s proposal for a $700 billion banking bailout ran into opposition from Republican lawmakers, with big financial companies lifting the Dow Jones industrials more than 120 points, but worries about smaller banks and parts of the technology sector taking much of the market lower.

President Bush told Congress Friday it must “rise to the occasion” and pass legislation bailing out the struggling financial system, and new bargaining was arranged at the Capitol despite heavy bickering, especially within the Republican caucus.

GOP lawmakers are concerned about the cost of the proposal, and they balked at the plan after congressional leaders said Thursday they had reached an agreement in principle. Shortly after Friday’s opening bell on Wall Street, President Bush said at the White House lawmakers can express doubts but ultimately should “rise to the occasion” and approve a plan to stave off what he sees as an economic calamity.

After dropping more than 125 points at the start, the Dow Jones Industrial Average pulled off its lows to rally late in the day, gaining 121.07, or 1.10 percent, to 11,143.13. Broader indicators were mixed. The Standard & Poor’s 500 index rose 4.09, or 0.34 percent, to 1,213.27, and the technology-heavy Nasdaq composite index fell 3.23, or 0.15 percent, to 2,183.34.

U.S.Stocks ended little changed Wednesday as indecision over the Bush administration’s bank bailout plan weighed on investors, offset somewhat by optimism over Warren Buffett’s deal to buy a stake in Goldman Sachs Group. The Dow Jones industrial average was ending down a modest 29 points at the 10,825 level in light volume.
 
The credit markets remained strained as investors tried to determine what shape the $700 billion plan will take.

Buffett’s Berkshire Hathaway Inc. said Tuesday it will invest at least $5 billion in Goldman Sachs Group Inc., a huge vote of confidence for one of the survivors of the credit crisis that felled two of its investment banking peers. In addition to buying $5 billion in preferred stock, Berkshire also got warrants to buy another $5 billion in Goldman’s common stock. Goldman also said late Tuesday it would raise another $2.5 billion in its own public stock offering.

The Dow Jones industrial average fell 29.00, or 0.27 percent, to 10,825.17 after moving in and out of positive territory. The Standard & Poor’s 500 index slipped 2.35, or 0.20 percent, to 1,185.87, and the Nasdaq composite index rose 2.35, or 0.11 percent, to 2,155.68.

U.S. Stocks appeared somewhat more upbeat Tuesday in the early trading, with stocks showing a partial rebound from a huge sell-off as top economic officials updated Congress about efforts to hammer out a $700 billion financial rescue plan. But they resumed their pullback in the mid of trading day as investors worried that lawmakers were losing the sense of urgency seen last week, when the government proposed a massive bailout for financial institutions as a way to revive ailing credit markets.

Federal Reserve Chairman Ben Bernanke bluntly warned reluctant lawmakers Tuesday they risk a recession with higher unemployment and increased home foreclosures if they fail to pass the Bush administration’s $700 billion plan to bail out the financial industry. Bernanke sketched a scenario in which neither businesses nor consumers could borrow money as President Bush and top lawmakers leaders in both parties voiced hope for agreement within days on a plan to ease the crisis.

The Dow Jones industrials are ending down 161.52, or 1.47 percent, to 10,854.17 after having risen more than 125 points in the early going and then falling by more than 180. The Standard & Poor’s 500 index fell 18.87, or 1.56 percent, to 1,188.22, and the Nasdaq composite index fell 25.67, or 1.18 percent, to 2,153.34.

U.S.Stocks fell sharply on Monday as uncertainty over the government’s plan to buy $700 billion in banks’ mortgage debt, taking the Dow Jones industrials down more than 370 points.

Investors were relieved that federal authorities are taking action to relieve the nation’s banks of their toxic assets. But it was not sure yet how successful the plan will be in loosening up the credit markets and propping up the sinking housing market.

Investors were also digesting a mix of corporate news. Microsoft Corp. said it plans to repurchase its shares. And Morgan Stanley said it is working to sell up to a 20 percent stake to Japan’s Mitsubishi UFJ Financial Group Inc.

Late Sunday, the Federal Reserve granted Morgan Stanley and Goldman Sachs, the country’s last two major investment banks, approval to change their status to bank holding companies. The change of status will allow the companies to set up commercial banks that will be able to take deposits, significantly bolstering the resources of both.

That shift came a week after negotiations failed to save Lehman Brothers Holdings Inc. That and the government’s plan to bail out American International Group Inc. helped lead to a seizing up of the credit markets that spurred the government to formulate its plan to rescue companies from their crippling debt.

In the maintime, Oil prices spiked more than $25 a barrel Monday — the biggest one-day price jump ever — as anxiety over the government’s $700 billion bailout plan, a weak dollar and an expiring crude contract ignited a dramatic rally. Light, sweet crude for October delivery jumped as much as $25.45 to $130 a barrel on the New York Mercantile Exchange before falling back to settle at $120.92, up $16.37.

The Dow fell 372.75, or 3.27 percent, to 11,015.69. The Standard & Poor’s 500 index fell 47.99, or 3.82 percent, to 1,207.09, and the Nasdaq composite index fell 94.92, or 4.17 percent, to 2,178.98.

Stocks end sharply higher on report that government will create entity to hold banks’ debt. The Dow Jones industrials up 400 points .

The government is considering a permanent solution to the credit crisis and as regulators looked to hinder bets against financial institutions.

the Dow soared 410.03, or 3.86 percent, to 11,019.69, surging 560 points from its low of the day, 10,459.44.The Standard & Poor’s 500 index rose 50.01, or 4.32 percent, to 1,206.60, and the Nasdaq composite index advanced 100.25, or 4.78 percent, to 2,199.10.