Stocks Rebound on BofA Help

By Kevin Spak,  Newser Staff
Posted Jan 16, 2009 8:46 AM CST
Traders confer on the floor of the New York Stock Exchange Thursday, Jan. 8, 2009   (AP Photo/Richard Drew)
camera-icon View 2 more images

(Newser) – Markets rebounded this morning, as a new round of federal aid rained down on Bank of America and Citigroup, the Wall Street Journal reports. The Dow rose 112 points, while the S&P and Nasdaq added 1.5% and 1.3% respectively. Bank of America posted a $1.79 billion loss, while Citi lost a stunning $8.29 billion, but shares of the banks rose 2% and 6% respectively, on news that the government would guarantee losses on $400 billion worth of assets

“The predilection being shown by the US government to continue to put up the cash to support the too-big-to-fail players is being lapped up by the markets,” said one derivative trader. The government will inject another $20 billion into Bank of America, and Citi announced that it would split into two business units. In the tech sector, Intel rose 3.8%, because its 90% profit drop was within analyst estimates.