In yet another attempt to help ailing companies shore up more capital, the Treasury Department agreed to extend nearly $22 billion in bailout funds to major life insurers. Some of the insurers expected to receive funds are The Hartford Group (HIG), Allstate (ALL) and Prudential Financial (PRU).
The funds will come from the TARP bailout fund, which was originally constructed to purchase toxic loans on the books of banks that were inhibiting their ability to make loans. The fund has quickly morphed into a capital backstop fund that has been used by the Treasury Department to make loans to the automotive industry and now insurers. The news sent the SPDR KBW Insurance (KIE) up nearly 1% in morning trading, despite being down 3.4% for the year. Allstate is 4.3%.
The Dow Jones Industrial Average was up 0.4%, the S&P 500 was down 0.1% and the Nasdaq climbed 0.5% in morning trading.
Kevin Grewal contributed to this report.