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Fed Announces $200 Billion in Help for Banks, Leading Dow to Biggest Day in 5 Years NEW YORK (AP) -- The Fed promised a $200 billion booster shot for ailing markets -- and Wall Street answered with its biggest bounce in more than five years. The Dow Jones industrials shot up more than 416 points, the biggest single-day point gain since July 2002, after the Federal Reserve announced the move as part of a worldwide effort to help struggling banks and mortgage providers. Hoping to ease the credit crisis, the Fed -- acting with the European Central Bank, the Bank of Canada and the Swiss National Bank -- agreed to loan investment banks money in exchange for debt, including slumping mortgage-backed securities. The idea is to create a market for assets that investors have recently been too scared to buy. That freeze in demand had sent asset values plunging and caused huge losses for some of the world's biggest banks. After a series of hefty losses in stocks, the market hopes the central banks' decision Tuesday might be more effective than previous moves -- like rate cuts, which had led to initial stock pops that later fizzled. "It's not just a rate cut. I think it's a very creative way to do financing," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group. "It shows the Fed is willing to do things that are a little out-of-the-box to shore up credit issues. I really think they went to the heart of the issue." Investors certainly seemed to like it: The Dow rose 416.66, or 3.6 percent, to 12,156.81. It was the biggest point jump in the Dow since a 447-point rise on July 29, 2002, and its widest one-day percentage gain since March 2003. The Dow had lost more than 500 points in the past three sessions and is still down about 2,000 points from its October 2007 record high. Broader stock indicators also soared. The Standard & Poor's 500 index rose 47.28, or 3.7 percent, to 1,320.65, while the Nasdaq composite index surged 86.42, or about 4 percent, to 2,255.76. It was the S&P's biggest point gain since April 5, 2001, and the Nasdaq's biggest since May 8, 2002. The latest step by the central banks was seen as a direct lifeline to investment banks, which previously couldn't borrow beyond already established Fed liquidity plans. The plan basically allows Wall Street's biggest institutions to put up troubled assets as collateral for loans, use the new capital to make money in the market, and then pay back the loan up to 28 days later. Though eventually banks would be forced to take the troubled mortgage-backed debt back on their books, the plan still takes short-term pressure off them. Many of these banks will release first-quarter earnings reports next week. "The big problem has been the financials, and this helps supply money directly to the banks and may take some of the need for aggressive rate cutting off the table," said Peter Dunay, chief investment strategist at Meridian Equity Partners. "The Fed is basically going to take the bad loans off the banks' books, and the market seems to be loving that idea." The Fed may have avoided dramatically slashing interest rates again when it meets next week. Economists remain concerned about the unrelenting rise in oil prices and the dollar's weakness, which contribute to inflation -- and cutting rates only adds to those pressures. Government bond prices fell as stocks rallied. The yield on the 10-year Treasury note, which moves opposite its price, spiked to 3.60 percent from 3.46 percent late Monday. Financial sector stocks, many of which have dipped to multiyear lows in recent days on liquidity concerns, led the market higher Tuesday. Citigroup Inc. rose $1.42, or 7.2 percent, to $21.11, Washington Mutual Inc. rose $1.72, or 17 percent, to $11.76, and Bank of America Corp. rose $1.33, or 3.8 percent, to $36.64. Morgan Stanley rose $4.19, or 10.9 percent, to $42.49, Lehman Brothers rose $3.33, or 7.8 percent, to $46.31, and Merrill Lynch rose $2.76, or 6.4 percent, to $45.60. Bear Stearns Cos. rebounded from losses to rise 67 cents to $62.97, even after an analyst said the No. 5 U.S. investment bank might need to sell itself, or layoff more staff, to stay afloat. The cost to insure Bear Stearns bonds has been spiking to all-time highs. A spokesman for Bear Stearns didn't immediately return telephone calls. The Fed's announcement overshadowed a report from the Commerce Department that showed the United States' trade deficit grew larger in January. The latest snapshot of the economy showed that the trade gap increased to $58.2 billion -- the highest since November. The primary reason behind the widening trade deficit is high oil prices. Crude rose as high as $109.72 in premarket trading on the New York Mercantile Exchange before ending at a new settlement record of $108.75. The weak dollar has contributed to oil's rally from $87 a barrel in January. Gold prices rose, while the dollar edged up against most other major currencies. The only sector posting major losses Tuesday was health care, which has been strong in recent months. WellPoint Inc. fell after Goldman Sachs trimmed its ratings in the managed care sector to neutral from attractive. The investment bank singled out WellPoint's performance amid pricing pressures. The stock plunged $18.66, or 28 percent, to $47.26. Google Inc. shares spiked after European Union regulators cleared the Internet company's $3.1 billion bid for online ad tracker DoubleClick. Shares of Google rose $26.22, or 6.3 percent, to $439.84. The Russell 2000 index of smaller companies rose 29.84, or 4.63 percent, to 673.81. Advancing issues surpassed decliners by more than 5-to-1 on the New York Stock Exchange. Consolidated volume came to 5.17 billion shares, up sharply from 4.15 billion shares Monday. Stocks overseas rebounded. Japan's Nikkei 225 stock average rose 1.01 percent, while Hong Kong's market closed up 1.28 percent higher. Britain's FTSE-100 rose 1.7 percent, Germany was up 2.01 percent, and France added 1.61 percent 2'nd Fed to Lend $200 Billion, Accept Mortgage Securities (Update10) March 11 (Bloomberg) -- The Federal Reserve, struggling to contain a crisis of confidence in credit markets, will for the first time lend Treasuries in exchange for debt that includes mortgage-backed securities. The Fed said in a statement in Washington it plans to make up to $200 billion available through weekly auctions. Officials told reporters on condition of anonymity that the program may be increased as needed. The Fed coordinated the effort with central banks in Europe and Canada, which plan to inject up to $45 billion into their banking systems. U.S. stocks rallied the most in five years on optimism the initiative will help avert a wider credit crunch. Treasuries fell and the premiums investors demand for debt backed by home loans guaranteed by Fannie Mae retreated from close to a 22-year high. Fannie Mae and Freddie Mac, chartered by the government, are the largest sources of money for U.S. home loans. ``This is the most significant step the Fed has taken so far,'' said David Resler , chief economist at Nomura Securities International Inc. in New York. ``This relieves some of the pressure'' in the credit markets, he said. Today's steps indicate the Fed is increasingly concerned about the investor exodus from mortgage debt, which threatens to deepen the housing contraction and the economic slowdown. Officials said the program is aimed at countering a decline in liquidity in financial markets around the world, and comes after signs of increasing stress in U.S. mortgage securities. Market Reaction The Standard & Poor's 500 stock index jumped 3.7 percent to 1,320.65. Ten-year Treasury yields climbed to 3.61 percent by 4:30 p.m. in New York, from 3.46 percent late yesterday. The extra yield investors demand to buy mortgage-backed bonds guaranteed by Fannie Mae instead of 10-year Treasuries narrowed to 2.12 percentage points, from 2.28 percentage points late yesterday. The yield spread has still widened from 1.38 percentage point in the past two months. Policy makers held a 90-minute conference call last night, where the Federal Open Market Committee authorized the new liquidity measure along with increases in swap lines with European central banks by a vote of 9-0, Fed spokeswoman Michelle Smith said. Fed Governor Frederic Mishkin <didn't vote because he was traveling, she said. Top-Rated Debt The Fed said it will lend Treasuries for 28-day periods in return for debt including AAA-rated mortgage securities sold by Fannie Mae, Freddie Mac and by banks. The loans will be made under a new program, the Term Securities Lending Facility, to so-called primary dealers, the 20 banks and securities firms that trade directly with the central bank. Officials ``will consult with primary dealers on technical design features'' on the new resource before the first weekly auction is held on March 27, the statement said. The Fed holds about $713 billion of Treasuries on its balance sheet. The resource allows dealers to switch debt that is less liquid for U.S. government securities that are easily tradable, the officials said. They anticipated that the primary dealers, which include Goldman Sachs Group. Inc., Bear Stearns Cos. and Merrill Lynch & Co., will lend the Treasuries on to other firms in return for cash. That will help the dealers finance their balance sheets, they told reporters. Valued at Discount Officials said they will discount the value of the assets submitted in exchange for Treasuries, though the details are still under discussion. , a bond analyst at Miller Tabak & Co. in New York, said the so-called haircuts may be around 10 percent on residential mortgage-backed securities. The Fed increased its currency swap line with the European Central Bank to $30 billion, from $20 billion, and one with the Swiss National Bank to $6 billion, from $4 billion. The U.S. central bank also extended the swaps through Sept. 30. The ECB said today it will lend banks up to $15 billion for 28 days and the SNB announced a similar auction of up to $6 billion. The Bank of England will offer $20 billion of three- month loans March 18 and hold another auction April 15. The Bank of Canada plans to buy $4 billion of securities for 28 days. The TSLF becomes the second new tool introduced by the Fed in three months. In December, the Fed set up the so-called Term Auction Facility to loan funds to banks in exchange for a wide variety of collateral, including mortgage debt. Other Tools Last week, the Fed increased the size of its planned TAF auctions, to $100 billion this month from a previously announced $60 billion. The central bank also said March 7 that it would make $100 billion available through repurchase agreements, where the Fed loans cash in return for assets including mortgage debt. That action, though, included only mortgage debt issued by Fannie Mae and Freddie Mac. ``They're trying to put out fires to the best extent they can,'' said David Greenlaw , chief fixed-income economist at Morgan Stanley in New York, who is a former researcher at the Fed Board of Governors. Today's announcement falls short of calls by some analysts and investors for the Fed to make outright purchases of mortgage securities. Scott Simon, an executive with Pacific Investment Management Co., said yesterday such purchases were ``getting to be a necessary idea.'' Fed officials said they want to increase liquidity and the regular functioning of markets, rather than determine appropriate prices for securities. Buying the home-loan debt directly would affect prices, they added. The measures are the latest in Chairman Ben S. Bernanke effort to alleviate increasing strains in financial markets that are curtailing credit to homeowners and companies, even after the Fed lowered its main interest rate by 2.25 percentage points. Traders removed bets on the Fed to lower its benchmark rate by a full percentage point, to 2 percent, by the end of the next meeting on March 18, futures showed. The contracts indicate a 76 percent chance of a 0.75 percentage-point reduction. ``This will assist some of the big banks,'' said Walter Gerasimowicz , head of Meditron Asset Management, which manages $1 billion. ``But it won't bring the light at the end of the tunnel. The housing-market problems will take at least all of this year to settle, and until that happens, the banks aren't going to be relieved fully.'' Best Regards Hendra Nova ________________________________ From: obrolan-bandar@yahoogroups.com [mailto:[EMAIL PROTECTED] On Behalf Of Jap in Sent: Wednesday, March 12, 2008 10:43 AM To: obrolan-bandar@yahoogroups.com Subject: Re: [obrolan-bandar] Index baru lari 10 m udah ngos-ngosan... emank payah...terlalu cepet ejakulasi nya...yang laen pada perkasa... ----- Original Message ---- From: ALX(tm) <[EMAIL PROTECTED]> To: obrolan-bandar@yahoogroups.com Sent: Wednesday, March 12, 2008 10:23:52 AM Subject: Re: [obrolan-bandar] Index baru lari 10 m udah ngos-ngosan... 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