Stocks Recover After Big Losses

Talk of Ambac bailout leads to late rally
By Nick McMaster,  Newser Staff
Posted Mar 4, 2008 3:49 PM CST
In this handout photo provided by the Independent Community Bankers of America (ICBA), Federal Reserve Chairman Ben Bernanke speaks to an audience of approximately 1100 community bankers during the annual...   (Associated Press)
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(Newser) – News of an impending bailout for bond insurer Ambac helped the markets recover from steep losses and end today's session down only slightly, MarketWatch reports. Down by 200 points at 2:30, the Dow closed only 45.10 down, ending at 12,213.80. The Nasdaq rose 1.68 to 2,260.28, and the S&P 500 lost 4.59 to close at 1,326.75.

Stocks rebounded to opening levels on a CNBC report that the capital infusion for Ambac could come as soon as tomorrow. Financials led the drop after Ben Bernanke's comments about reducing mortgage principle for borrowers at risk of foreclosure. "People get spooked because the Federal Reserve is still talking about the weakness in the economy and banks' mortgage exposure,'' said one fund manager.