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.


What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video


Top questions surrounding future of DOL fiduciary rule

Reporter Greg Iacurci and managing editor Christina Nelson discuss the biggest uncertainties springing from the Fifth Circuit Court of Appeals' decision to vacate the regulation.

Latest news & opinion

What the next market downturn means for small RIAs

Firms that have enjoyed AUM growth because of the runup in stocks may find it hard to adjust to declining revenues if the market suffers a major correction.

DOL fiduciary rule likely to live on despite appeals court loss

Future developments will hinge on whether the Labor Department continues the fight to remake the regulation its own way.

DOL fiduciary rule: Industry reacts to Fifth Circuit ruling

Groups on both sides of the fiduciary debate had plenty to say.

Fifth Circuit Court of Appeals vacates DOL fiduciary rule

In split decision, judges say agency exceeded authority.

UBS, after dumping the broker protocol, continues to see brokers come and go

The wirehouse has seen 14 individuals or teams leave and five join for a net loss of $2.4 billion in AUM


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 It'll help us continue to serve you.

Yes, show me how to whitelist

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


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print