What a difference 24 hours makes: Bear Stearns’ shares were downgraded by Moody’s on Monday, a move that weighed heavily on financial exchange traded funds (ETFs).
It sent the Financial Select Sector SPDR (XLF) down 2.8% for the day, reports John Spence for MarketWatch. A mere 24 hour later, that same fund is up more than 6%, thanks to the Federal Reserve’s latest effort to breathe some life into the weakening economy.
It plans to pump $200 billion into the financial markets, reports Joe Bel Bruno for the Associated Press. The hope in doing that is that it will create a market for assets investors have been too skittish to buy.
Wall Street rallied and the Dow Jones industrial average shot up more than 400 points – the biggest one-day gain since July 24, 2002.
Other financials gave stellar performance today, as well: the iShares Dow Jones US Financial Services (IYG) was up more than 8%, and the iShares Global Financial (IXG) shot up more than 6%.
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