Dow Gains 936 on New Bailouts

Biggest one-day boost for Dow on record
By Nick McMaster,  Newser Staff
Posted Oct 13, 2008 3:35 PM CDT
A pair of traders smile as they work on the floor of the New York Stock Exchange, Monday Oct. 13, 2008.   (AP Photo/Richard Drew)

(Newser) – Weekend news of coordinated global action to buy stakes in troubled banks cheered investors, and the Dow posted its biggest-ever 1-day jump in both points and percentage today, MarketWatch reports. The index rose 936.42 to 9,387.61, the Nasdaq jumped 194.74 to 1,844.25, and the S&P 500 rose 104.13 to 1,003.35. Morgan Stanley closed at $17.92, up 85% over Friday's close, after Mitsubishi UFJ sealed a deal to buy 21% of the financial-services behemoth.

Despite the cheery mood, many investors warned that numbers at the end of last week's sharp decline may not have marked the bottom for this crisis: Spreads between high-yield corporate debt and Treasury bonds suggest that shocks from the crisis may depress the economy for the next year, leading to 8% unemployment. "I'm not sure if our economy has prepared itself for 8% unemployment," said one economist. “You have a lot of households that have a lot of debt.”