- The Washington Times - Friday, September 26, 2008

NEW YORK

Financial markets got more upbeat Thursday as political leaders worked on a massive spending plan to revive the crippled financial system. The Dow Jones Industrial Average jumped about 200 points on optimism about the bailout, and demand for safe-haven assets remained high but eased slightly as some investors placed bets that a deal would help unclog credit markets.

Stock market investors got a lift when key lawmakers said they would present the $700 billion plan to the Bush administration and hoped for a vote by both houses of Congress within days. Still, some resistance remained from House Republicans as the closing bell on Wall Street rang ahead of a meeting of congressional leaders at the White House.

Investors’ mood has fluctuated this week as they watched the negotiations on the plan gain momentum, and trading is likely to remain difficult in the coming days.

The Dow rose 196.89, or 1.82 percent, to 11,022.06. The gain helped the Dow erase losses from heavy selling earlier in the week, though the blue chips still remain down by more than 360 points, or 3.2 percent.

Broader stock indicators also rose Thursday. The Standard & Poor’s 500 Index advanced 23.31, or 1.97 percent, to 1,209.18 and the Nasdaq Composite Index rose 30.89, or 1.43 percent, to 2,186.57.

Advancing issues outnumbered decliners by nearly 3 to 1 on the New York Stock Exchange, where volume came to a relatively light 1.21 billion shares.

The dollar was mixed against other major currencies Thursday, while gold prices fell.

Light, sweet crude for November delivery rose $2.29 to settle at $108.02 a barrel on the New York Mercantile Exchange.

Meanwhile, disappointing readings on employment, housing and demand for big-ticket manufactured goods, as well as a sobering forecast from General Electric Co., underscored the difficulties facing the economy.

The Labor Department said the number of people seeking unemployment benefits increased by 32,000 to a seasonally adjusted 493,000 last week - the highest level in seven years and well above analysts’ expectations of 445,000. Hurricanes Ike and Gustav added about 50,000 new claims in Louisiana and Texas, the department said.

The Commerce Department said sales of new homes fell sharply in August to the slowest pace in 17 years. The average sales price also fell by the largest amount on record. New homes sales dropped by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales pace since January 1991.

The department also said orders for expensive manufactured goods sank in August by the largest amount in seven months as demand for both airplanes and cars sank. Durable goods orders fell by 4.5 percent last month, far worse than the 1.6 percent decline that economists expected and the biggest drop since a 4.7 percent fall in January.

GE lowered its forecast for third-quarter and full-year earnings, citing unprecedented weakness and volatility in the financial services markets. The stock, which had declined in the early going, finished up $1.09, or 4.4 percent, to $25.68 alongside the broader market.


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