Wall St rebounds as legislators hammer out deal
US stocks rose on Thursday as Congress neared completion of a $700 billion administration bailout aimed at reviving the ailing economy.business Updated: Sep 26, 2008 12:05 IST
US stocks rose on Thursday as Congress neared completion of a $700 billion administration bailout aimed at reviving the ailing economy.
Christopher Dodd, a Democrat from Connecticut and chair of the Senate banking committee, said on Thursday afternoon an agreement on a deal had been reached in principle, but must still be ironed out with congressional leaders and the administration.
"We've reached a fundamental agreement on a set of principles," Dodd said.
US President George W Bush later met with congressional leaders and presidential candidates John McCain and Barack Obama on the deal.
The plan would see the government acquire mortgage-related securities that are at the heart of the credit crisis that has pulled down the US financial sector.
Last week wild swings in the market as Lehman Brothers filed for bankruptcy and the government intervened to help save insurer American International Group (AIG) led the administration to offer a rescue plan.
Thursday's developments pushed up financial stocks, with Bank of America, JP Morgan Chase & Co and Citigroup Inc jumping as much as 7.3 per cent after Dodd's remarks, Bloomberg financial news reported.
The blue chip Dow Jones Industrial Average picked up 196.89 points, or 1.8 per cent, to 11,022.06. The broader Standard & Poor's 500 Index gained 23.21 points, or 1.97 per cent, to 1,209.18. The technology-heavy Nasdaq Composite Index gained 30.89 points, or 1.43 percent, to 2,186.57.
The US currency rose to 68.43 euro cents from 68.40 euro cents on Wednesday. The greenback rose against the Japanese yen to 106.51 from 106.13 yen on Wednesday.