24 March,2009 07:33 AM IST | | AFP
Wall Street shares skyrocketed as the market cheered a government-private sector plan to clean up toxic assets clogging the balance sheets of banks to help stabilise the US economy.
Yesterday, the Dow Jones Industrial Average catapulted 497.48 points (6.84 per cent) to 7,775.86 and the tech-heavy Nasdaq leapt 98.50 points (6.76 per cent) to 1,555.77. The broad Standard & Poor's 500 powered higher by 54.38 points (7.08 per cent) to a preliminary close of 822.92.
The market welcomed to a public-private sector programme by President Barack Obama's administration to help the ailing banking system recover from massive losses suffered in the US real estate meltdown.
The cornerstone of the plan announced by Treasury Secretary Timothy Geithner is a "Public-Private Investment Programme for Legacy Assets" funded with USD 75 to 100 billion from the government -- an idea that has generated some praise but also skepticism. Officials said this approach would "generate USD 500 billion in purchasing power" and could expand to USD one trillion.
"One ray of light to the resolution of the financial crisis is better than no ray at all, and markets gave this next phase of the programme a relatively enthusiastic endorsement," said IHS Global Insight chief US economist Brian Bethune.
