Stocks soar on $200M Fed infusion

Mar 11, 2008 @ 1:23 pm

By Aaron Siegel

In an effort to provide liquidity to cash-strapped financial institutions, the Federal Reserve will lend up to $200 billion of treasury securities to bond dealers in exchange for collateral such as mortgage-backed securities.

The securities will be made available through an auction process.

Auctions will be held on a weekly basis, beginning on March 27.

Additionally, the Federal Open Market Committee has authorized increases in its existing temporary reciprocal currency arrangements the European Central Bank, the Bank of England and the Swiss National Bank and the Bank of Canada.

Under the arrangements, The European Central Bank said it would offer $30 billion in loans, while the Swiss National Bank will offer $6 billion in loans.

The Bank of England said it would extend its ten billion pound lending program.

The Bank of Canada will auction $4 billion in 28-day repurchase agreements over the next month.

The actions, which were announced today, supplement the measures announced by the Federal Reserve on Friday to boost the size of the Term Auction Facility to $100 billion and to undertake a series of term repurchase transactions that will equal $100 billion (InvestmentNews, March 8) .

The announcement pushed markets to their biggest one-day percentage gain since 2003.

In late-afternoon trading, the Dow Jones Industrial Average rose 357.96 points to 12098.11, the Nasdaq jumped 72.15 to 2241.49 and Standard & Poor's 500 increased 39.18 to 1312.55.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Diversity & Inclusion Awards: 2018 nominations are open

Editor Fred Gabriel and special projects editor Liz Skinner discuss the nomination process for InvestmentNews' inaugural Diversity & Inclusion awards.

Latest news & opinion

Cetera reportedly exploring $1.5 billion sale

The company confirmed it's talking to investment bankers to 'explore how to best optimize [its] capital structure at lower costs.'

SEC Chairman Jay Clayton outlines goals for a new fiduciary standard

Rule should provide clarity on role of adviser, enhanced investor protection and regulatory coordination.

Advisers bemoan LPL's technology platform change

Those in a private LinkedIn chat room were sounding off about fears the independent broker-dealer will require a move to ClientWorks before it is fully ready.

Speculation mounts on whether others will follow UBS' latest move to prevent brokers from leaving

UBS brokers must sign a 12-month non-solicit agreement if they want their 2017 bonuses.

Maryland jumps into fiduciary fray with legislation requiring brokers to act in best interests of clients

Legislation requires brokers to act in the best interests of clients.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print