U.S. Markets Surge As Credit Starts to Thaw; Fed's Debt-Buying Program Gaining Traction
Stocks skyrocketed nearly 11 percent yesterday in the second-biggest point gain ever for the Dow Jones industrial average, buoyed by signs of improving credit conditions and expectations that the Federal Reserve would slash a key interest rate today.</br></br>Investors were cheered by reports that the Fed was making progress in unlocking corporate debt markets through its program to buy commercial paper, or loans used for everyday operations, and by developments at major blue-chip companies Boeing and General Motors.</br></br>GM chairman and chief executive G. Richard Wagoner Jr. was in Washington over recent days negotiating with Treasury officials for government money to help finance a proposed merger with Chrysler, said an industry source briefed on the matter.</br></br>But analysts and investors warned that continuing global economic uncertainty could send the stock market tumbling again in coming days. They also said low trading volume made them cautious about declaring the market had turned a corner. Moreover, stocks often rally the day before the Fed's policymaking committee meets and then lose some of those gains soon thereafter.</br></br>"Is this a real bottom? I'd be more convinced if there were more volume behind trading," said Alan Lancz, president of Alan B. Lancz & Associates, an investment firm in Toledo.