Late Rally Lands Dow Up 410

Fed may have plan to quarantine bad debt; banks see gains
By Nick McMaster,  Newser Staff
Posted Sep 18, 2008 3:25 PM CDT
Trader David Eilenberg leans on a phone post as he works on the floor of the New York Stock Exchange today.   (AP Photo)
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(Newser) – The markets rallied late in today’s rollercoaster session, keying on a $360 billion plan to shore up money markets and reports that the Fed might form a government body to absorb firms’ bad credit bets, the Wall Street Journal reports. The Dow gained 410.03 to close at 11,019.69. The Nasdaq closed up 100.25 at 2,199.10, while the S&P 500 rose 50.01, settling at 1,206.40.

AIG gained 18.7% in the wake of its $85 billion government bailout, although it will be removed from the Dow’s 30 components in favor of Kraft on Monday. Washington Mutual rose 37.8% on reports it is seeking a buyer. Bearish sentiment moves “from one stock to the next and nobody knows what they're going to,” one trader said. “They're just hitting them now and I don't know what turns them around.”