The Dow rallied on Monday as investors applauded the decision by Washington to inject $20 billion into Citigroup in an effort to prevent a bank collapse which could have endangered the global financial system.
Dow component Citigroup, the second-largest U.S. bank, surged over 50 percent and was among the Dow's top-weighted advancers as the bailout plan eased jittery investors' concerns regarding the financial sector. Last week, Citigroup's stock tumbled to its lowest level in about 15 years amid uncertainty over the bank's future.
"The markets love a bailout," said Brian Gendreau, investment strategist at ING Investment in New York. "It seems to have instilled a bit of confidence in the sector itself."
The government's cash infusion for Citi represented the biggest U.S. bank bailout to date, lifting shares of major financial stocks. JPMorgan Chase , Bank of America and Well Fargoall closed higher.
That much seems pretty straight forward. But there's more. (When isn't there?)
Joe Terranova sees Monday's rally a little differently. He says, we had a collective 1000 point rally (over 2 trading days) for no other reason than we had a deeply oversold market and the market liked getting some degree of certainty.”
He also says, “The market wants to move higher. We all want to go back into that swimming pool and enjoy that beautiful sunny day again, but we need the leadership to know that the pool has been properly cleaned.”
He's still waiting. We'll keep you posted.
Got something to to say? Send us an e-mail at email@example.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to firstname.lastname@example.org.
CNBC.com with wires