New Fed Debt Relief Effort Lifts Wall Street
10/07/08 - 09:45 AM EDT
Mike Taylor
Updated from 9:02 a.m. EDT
Stocks in New York opened to the upside Tuesday, after the Federal Reserve said it would buy short-term debt from U.S. companies to provide relief from the credit crisis. The Fed announced creation of a new lending facility to buy short-term commercial paper from businesses. The central bank also said it expects the new lending program to remove the stoppage in the credit markets. The Dow Jones Industrial Average was adding 80 points to 10,036, and the S&P 500 was up 9 points to 1066. The Nasdaq gained 15 points to 1877. On Monday, the major indices sold off frantically only to recover from much of their losses as the credit crisis manifested itself outside the U.S. The Dow Jones Industrial Average, down as much as 800 points during the session, ended with a loss of 369 points, or 3.6%. Nasdaq and the S&P 500 finished down 3.9% and 4.3%, respectively. After Monday's close, Bank of America (BAC Quote - Cramer on BAC - Stock Picks) announced it would cut its dividend and raise $10 billion in fresh capital as it reported quarterly earnings ahead of schedule. Meanwhile, Citigroup (C Quote - Cramer on C - Stock Picks) and Wells Fargo (WFC Quote - Cramer on WFC - Stock Picks) agreed to take a two-day breather from their legal fight over who would get to acquire Wachovia (WB Quote - Cramer on WB - Stock Picks). In the technology sector, chipmaker Advanced Micro Devices (AMD Quote - Cramer on AMD - Stock Picks) announced a plan to spin off its manufacturing operations. Automaker Adam Opel, a segment of General Motors (GM Quote - Cramer on GM - Stock Picks), said it would cease production at its Eisenach, Germany plant, according to the AP. As for economic data, traders will get a look at minutes from the Federal Open Market Committee's Sept. 16 meeting, when it elected to leave its key interest rate unchanged at 2%. Later in the afternoon, the Fed's look at U.S. consumer credit is due for release.
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