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Market reacts coolly to bank bailout repayment
Source: Agencies |
June 10, 2009, Wednesday
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Online Edition
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INVESTORS reacted coolly to word that 10 of the nation's largest banks can repay US$68 billion in bailout money.
Stocks zigzagged in a narrow range yesterday after the Treasury Department's widely expected announcement that the banks will be allowed to repay the money they received from the US$700 billion Troubled Asset Relief Program created by Congress last October at the height of the financial crisis.
Traders had already sized up those banks that they deemed in good enough shape to repay the money. But the news still helped push banks moderately higher.
Technology stocks advanced after Texas Instruments Inc. raised its profit forecast for the quarter. That stirred hopes that the semiconductor industry could see a rebound in demand.
A falling dollar pushed up energy prices and helped stocks of energy companies and materials producers.
The banks have been eager to get out of the program to escape government restrictions such as caps on executive compensation. Among the banks that confirmed that they received permission to repay the bailout funds were: JPMorgan Chase & Co., American Express Co., U.S. Bancorp, Capital One Financial Corp., Bank of New York Mellon Corp. and BB&T Corp.
In midafternoon trading, the Dow Jones industrial average rose 14.97, or 0.2 percent, to 8,779.46. The broader Standard & Poor's 500 index rose 4.15, or 0.4 percent, to 943.29, and the technology-laden Nasdaq composite index rose 19.72, or 1.1 percent, to 1,862.12.
Texas Instruments rose US$1.27, or 6.4 percent, to US$21.04.
Materials and energy companies rose. Aluminum producer Alcoa Inc. rose 39 cents, or 3.6 percent, to US$11.16 and U.S. Steel Corp. rose US$2.75, or 7.9 percent, to US$37.81. In energy, Occidental Petroleum rose US$1.05 to US$69.38.
Investors also kept a close eye on Treasury prices as yields on two-year and 10-year notes rose to new yearly highs Monday ahead of auctions this week. There is concern the Federal Reserve will need to hike interest rates before the end of the year to stave off inflation.
The yield on the benchmark 10-year Treasury note, which moves opposite to its price, fell to 3.88 percent yesterday from 3.89 percent late Monday. The yield is a widely used benchmark for home mortgages and other loans.
In other trading, the Russell 2000 index of smaller companies rose 4.84, or 0.9 percent, to 529.63.
About three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 567.2 million shares compared with 564.6 million shares traded at the same time Monday.
Stocks zigzagged in a narrow range yesterday after the Treasury Department's widely expected announcement that the banks will be allowed to repay the money they received from the US$700 billion Troubled Asset Relief Program created by Congress last October at the height of the financial crisis.
Traders had already sized up those banks that they deemed in good enough shape to repay the money. But the news still helped push banks moderately higher.
Technology stocks advanced after Texas Instruments Inc. raised its profit forecast for the quarter. That stirred hopes that the semiconductor industry could see a rebound in demand.
A falling dollar pushed up energy prices and helped stocks of energy companies and materials producers.
The banks have been eager to get out of the program to escape government restrictions such as caps on executive compensation. Among the banks that confirmed that they received permission to repay the bailout funds were: JPMorgan Chase & Co., American Express Co., U.S. Bancorp, Capital One Financial Corp., Bank of New York Mellon Corp. and BB&T Corp.
In midafternoon trading, the Dow Jones industrial average rose 14.97, or 0.2 percent, to 8,779.46. The broader Standard & Poor's 500 index rose 4.15, or 0.4 percent, to 943.29, and the technology-laden Nasdaq composite index rose 19.72, or 1.1 percent, to 1,862.12.
Texas Instruments rose US$1.27, or 6.4 percent, to US$21.04.
Materials and energy companies rose. Aluminum producer Alcoa Inc. rose 39 cents, or 3.6 percent, to US$11.16 and U.S. Steel Corp. rose US$2.75, or 7.9 percent, to US$37.81. In energy, Occidental Petroleum rose US$1.05 to US$69.38.
Investors also kept a close eye on Treasury prices as yields on two-year and 10-year notes rose to new yearly highs Monday ahead of auctions this week. There is concern the Federal Reserve will need to hike interest rates before the end of the year to stave off inflation.
The yield on the benchmark 10-year Treasury note, which moves opposite to its price, fell to 3.88 percent yesterday from 3.89 percent late Monday. The yield is a widely used benchmark for home mortgages and other loans.
In other trading, the Russell 2000 index of smaller companies rose 4.84, or 0.9 percent, to 529.63.
About three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 567.2 million shares compared with 564.6 million shares traded at the same time Monday.
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