Dow Jumps More Than 300 at the Open
Stocks shot out of the gate Tuesday, a nice chaser to the Dow's biggest one-day point gain in history, after the government announced a plan to buy stakes in the nation's largest financial institutions.
The Dow Jones Industrial Average jumped more than 300 points in the first few minutes of trading, adding to its record 936.42-point gain on Monday. That puts the Dow within 300 points of the 10,000 mark.
Twenty-eight of 30 Dow stocks were higher, led by Citigroup , Bank of America and General Motors .
Only Coca-Cola and Microsoft declined.
The rescue plans sent the Nikkei soaring 14 percent on Tuesday. European markets also extended Monday's rally, with stock markets up between 4 and 5 percent in morning trading.
The U.S. has agreed to inject $250 billion directly into banks, mirroring moves by other countries, to boost confidence in lending. The money will come from the $700 billion bailout plan announced a few weeks ago and nine banks will get the bulk of it.
Under terms of the plan, the government would buy preferred equity stakes in Bank of America, Citigroup, Wells Fargo, JPMorgan Chase, Goldman Sachs, Morgan Stanley and Bank of New York Mellon, Reuters reported.
State Street and Merrill Lynch are also to receive a capital injection, other media reports said.
Bernanke said the rescue plan to would restore normality to markets and lay the groundwork for economic recovery.
President Bush said, "The government's role will be limited and temporary."
But some experts are skeptical, saying the sweeping measures will probably fail. The proposed $250 billion infusion into financials is merely a drop of water on a hot stove, Marc Faber, editor & publisher of the Gloom, Boom and Doom Report said, as they do not address the fundamental problem of deleveraging.
On the earnings front, Dow component Johnson & Johnsonbeat market expectations on Tuesday, with earnings per share of $1.17 in the third quarter as its sales rose.
Analysts surveyed by Thomson Reuters had expected Johnson & Johnson to post a profit per share of $1.11.
Beverage and snack maker Pepsicoreported quarterly earnings shy of market expectations Tuesday, despite revenue rising 11 percent from the comparable period a year ago.
Pepsi reported a profit of 99 cents a share in the third quarter, the same as it reported in the year-ago period.
TUESDAY: Earnings from Johnson & Johnson, Pepsi
WEDNESDAY: Weekly mortgage applications; Empire State manufacturing survey; PPI; retail sales; business inventories; weekly crude inventories; Fed's beige book; Earnings from Abbott Labs, Coca-Cola, JPMorgan, Wells Fargo and eBay
THURSDAY: CPI; weekly jobless claims; industrial production; Philly Fed survey; weekly natural-gas inventories; Earnings from Bank of New York Mellon, BB&T, Citigroup, CIT Group, Continental, Harley-Davidson, Hershey, Merrill Lynch, Nokia, PNC Bank, Southwest Air, United Technologies, AMD, Capital One, Google and IBM
FRIDAY: Housing starts; consumer sentiment; Earnings from Gannett, Honeywell and Sony Ericsson
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