Stocks Fail To Continue Momentum
Bush To Hold Talks On World Economic Crisis
Tuesday, October 14, 2008 – updated: 9:20 pm EDT October 14, 2008
Stock prices on Wall Street ended a relatively calm day with a moderate decline, with the Dow failling 77 points as profit-taking set in after Monday's massive advance. It's the first time in nine sessions that the Dow hasn't closed up or down in triple digits.
After some early gyrations, stock prices fluctuated during the day, but the Dow and the Standard & Poor's 500 index were often in the plus column. Investors were optimistic about the government's plans to spend $250 billion to buy stock in private banks, but they also decided to collect profits from the surge that sent the Dow up 936 points. The Dow closed at 9,310 level after being up more than 400 and down more than 300. The Nasdaq composite index showed a sharper decline, falling more than 3 percent to the Dow's pullback of under 1 percent, as investors gravitated toward stocks they believed would benefit most from the government's financial sector plans.
President George W. Bush plans to hold talks on the global economic turmoil Saturday at his Camp David retreat with French President Nicholas Sarkozy. The White House, in announcing the president's plans, said Tuesday that European Commission President Jose Manuel Barroso will also attend the weekend meeting. White House press secretary Dana Perino said that Bush spoke by phone Tuesday morning with Sarkozy and the leaders of Britain and Germany following meetings at the White House on Monday with Italian Premier Silvio Berlusconi. Bush also has scheduled a Cabinet meeting at the White House on Wednesday.
Bank Shares Plan
The government's move to use a chunk of the $700 billion bailout funds to buy bank shares follows a similar one announced Monday by European governments to invest about $2 trillion in their own troubled banks.Bush said the moves are "not intended to take over the free market, but to preserve it." Bush said the federal government will use some of the $700 billion bailout funds to inject money into banks "by purchasing equity shares." He said the Federal Deposit Insurance Corp. will "temporarily guarantee" most new debt issued by insured banks. The FDIC also will expand government insurance to cover all non-interest-bearing accounts, aiding small businesses in covering their day-to-day operations. The president also said the Federal Reserve will "soon finalize work" on a new program to serve as a buyer of last resort for commercial paper. Bush, in the latest of a series of statements on the troubled economy, said that and other steps will help restore confidence and "return our economy to the path of growth and prosperity." The government is expected to initially purchase stock of nine large banks, but the program is expected to be expanded to many others. Among the initial banks participating will be all of the country's largest institutions, including Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co, Bank of America Corp. and Morgan Stanley, said one official, who added that administration briefers did not provide any amounts that would be received by individual banks.There would also be a bold step to unlock a vital credit flow -- bank-to-bank lending, which has dropped sharply over fears of repayment amid billions in bank losses.Candidates Offer Solutions On Campaign Trail
Both Sens. John McCain and Barack Obama offered new ideas to combat the financial crisis.McCain announced that on Tuesday, he would unveil new economic proposals aimed at middle-class taxpayers.Campaign spokesman Tucker Bounds said McCain "will address the ongoing financial and economic crisis, with a special emphasis on those most badly hurt: workers, homeowners, savers and seniors."Word of the proposals came on the same day McCain delivered his toughest criticism so far of Bush's economic policies.In Virginia, McCain said, "We cannot spend the next four years as we have spent much of the last eight: waiting for our luck to change."During a campaign stop in Toledo, Ohio, Obama proposed steps to heal the economy, including a 90-day moratorium on home foreclosures at some banks and a two-year tax break for businesses that create new jobs.Obama also proposed allowing people to withdraw up to $10,000 from their retirement accounts without any penalty this year and next.The Democratic presidential candidate said his proposals, with a price tag of $60 billion over two years, can be enacted quickly. Related Stories:
Previous Stories:
- October 13, 2008: Gov't Plans To Invest $250B Into U.S. Banks
- October 12, 2008: Stock Futures Hint Of Opening-Bell Optimism
- October 11, 2008: Bush Leads Push To Fix World Credit Crisis
- October 10, 2008: Dow Ends Worst Week; Gov't To Buy Bank Stock
- October 9, 2008: Dow Dives; Bush Seeks To Reassure Americans
- October 8, 2008: Paulson Vows To Move Quickly On Rescue Plan
- October 7, 2008: Stocks Unimpressed With Fed Moves
- October 7, 2008: More Hearings To Probe Wall Street Fallout
- October 5, 2008: Financial Crisis Likely Means More Bank Failures
- October 4, 2008: For Bailout To Work, Housing Market Must Mend
- October 3, 2008: Wall Street Bailout: House Roll Call
- October 3, 2008: Bush Signs House-Approved Bailout Bill
- October 1, 2008: Some In House Reconsidering Bailout Support
- October 1, 2008: Bush Praises Senate Passage Of Bailout
- September 30, 2008: Senate To Vote On Financial Rescue Plan
- September 29, 2008: Bailout Package Fails; Dow Sinks To New Level
- September 28, 2008: Plan Wins Praise; Few Fully Satisfied
- September 28, 2008: Pelosi: Breakthrough Reached On Financial Bailout
- September 26, 2008: Top Democrat Expects Deal By Sunday
- September 25, 2008: Bailout Deal Stalls; Talks To Resume Friday
- September 24, 2008: Bush Warns Of 'Long And Painful Recession'
- September 24, 2008: Financial Warnings Fail To Sway Congress
- September 22, 2008: Bush, Congress Agree On Some Bailout Terms
- September 22, 2008: Major Wall Street Makeover Continues
- September 21, 2008: Obama, McCain Trade Barbs Over Financial Crisis
- September 20, 2008: Work Continues On $700B Bailout
- September 19, 2008: Stocks Soar With Gov't Efforts Unveiled
- September 19, 2008: Wall Street Rescue Plan Could Come Today
- September 18, 2008: Markets Melting Worldwide On US Fallout
- September 18, 2008: Market Meltdown Shakes Up Washington
Distributed by Internet Broadcasting Systems, Inc. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.













