The Financial Crisis: This Day—One Year Ago, Sept. 30, 2008
Hope holds—for a change.
On Tuesday, the Wall Street-Washington roller-coaster seems to start all over again. Futures show stocks set to rally after having plunged the previous day, with investors still hoping Congress will find a way to approve a $700-billion financial bailout plan which the House of Representatives rejected on Monday.
"There's an overarching belief that at some point this week, whether it's Wednesday or Thursday, we'll get something passed by the House," Arthur Hogan, chief market analyst at Jefferies, says.
What You Were Reading:
- Financial Psychiatrist: Take a Deep Breath
- The Failed Bailout: Panic and Blood, at Last!
- Slideshow: Credit Crunch Battle Play-by-Play
President George W. Bush speaks briefly in a live televised segment before the market opens, reminding viewers that hope is alive because the legislative process isn't over.
"Congress must act. ...Our economy is depending on decisive action from the government. The sooner we address the problem, the sooner we can get back on the path of growth and job creation," Bush says.
Here's how September 2008 ended.
US Stock Markets:
After Monday's market bloodbath, the New York Stock Exchange enacts circuit-breaker trigger levels for the Dow in the fourth quarter. A 1100-point drop before 2pm ET will halt trading for one hour; a 2200-point drop before 1pm will stop trading for two hours; and a 3350-point drop will shut down trading for the rest of the day, regardless of what time it occurs.
On Tuesday, the Dow rises 485.21, or 4.7 percent, to close at 10850.66, erasing much of the record 777.68-point loss it suffered Monday. But the Dow ends September down 6 percent. The blue-chip index sheds 4.4 percent for the third quarter.
The S&P 500 gains 5.3 percent, marking its best day in six years. However, September was its worth month in six years, with the index down 9.2 percent for the month and 9 percent for the quarter.
The Nasdaq advanced 5 percent, with the index down more than 12 percent since the summer ended. The tech-heavy index shed 9.2 percent for the quarter.
Volume was light Tuesday due to Rosh Hashanah, the Jewish new year holiday, at 1.6 million shares on the NYSE.
The Vix (CBOE Volatility Index) confirms that the fear has subsided somewhat Tuesday, dropping below 40 after hitting a record 46.72 in the prior session. The VIX is up a staggering 91 percent for September and 65 percent for the quarter.
The big banks, Citigroup, JPMorgan Chase and Bank of America, are the Dow's top three gainers, clawing back at least 14 percent Tuesday after losing more than 12 percent Monday.
Barclays Capital, the investment banking division of Barclays Bank, says it has relaunched Lehman Brothers' US equity trading and research unit under the Barclays Capital name.
Some corporate leaders are rebelling against inclusion on the "no-short" list, saying the intended protective status against short selling can actually hamper their businesses. Rick Dillon, chief executive of Diamond Hill Investment Group, tells CNBC he requested his firm be removed from the list. Watch his interview here.)
What You Were Reading:
It's announced that the S&P/Case Shiller home-price index plunged a record 16.3 percent in July from a year earlier, though that was roughly inline with what economists had expected. The Chicago purchasing-managers index slipped in September, though not as much as expected. A gauge of consumer confidence rose to 59.8 in September from 58.5 in August, the Conference Board reports.
Belgian-French financial services group Dexia gets a capital boost of 6.4 billion euros ($9.18 billion) from Belgium, France, Luxembourg and key shareholders. The bank's CEO and chairman resigns Tuesday morning.
Ireland moves to guarantee all bank deposits for two years in order to avoid a confidence crisis in its banks.
The price on 10-year US Treasurys falls two points midafternoon on Tuesday, as the stock market rebound drives an unwinding of safety bids for bonds.
What the Experts Were Saying:
Mark Tinker of AXA Framlington Gemini sees a key problem not being addressed: "The SEC have got to suspend these mark-to-market rules," he tells CNBC.
Was the bailout rejection actually for the best? Roger Nightingale of Pointon York and Benjamin Pedley of LGT Investment Management debate.