Stocks jump on bailout hopes

Wall Street breathes a sigh of relief as historic bailout plan appears to be progressing.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Aaron Smith, CNNMoney.com staff writer

What's your view about granting taxpayers stock in any company taking part in the proposed $700 billion bailout?
  • It's needed to approve the plan
  • The plan should be approved with no conditions
  • No bailout in any form

NEW YORK (CNNMoney.com) -- Stocks gained Thursday morning, as optimism that a deal on the $700 billion bank bailout plan is near tempered the latest weak reports on the economy - including GE's profit warnings and a seven-year high for weekly jobless claims.

The Dow Jones industrial average (INDU), the Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all gained in the early going.

On Wednesday, markets ended mixed amid ongoing jitters over the government's $700 billion bailout proposal. The Dow and S&P 500 both slipped by about 0.2% and the Nasdaq gained 0.1%.

Late Wednesday, President Bush addressed the nation, delivering a grave speech about the "serious financial crisis," while noting that "our entire economy is in danger.

The prime-time address capped off a day in which Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson appeared before Congressional panels attempting to negotiate terms of the proposed bailout.

As of Thursday morning, lawmakers and officials seemed to be closer to a deal, and that reassured stock investors in the early going.

Jobless claims: The Labor Department reported that jobless claims surged to 493,000 in the week ended Sept. 20, sharply higher than the 445,000 projected by economists surveyed by Briefing.com.

That marks the highest figure since the week ended Sept. 29, 2001, immediately after the terrorist attacks on the World Trade Center and the Pentagon. The government said that 50,000 of the jobless claims were the result of Hurricanes Ike and Gustav. Discounting those claims, the figure was actually slightly better than forecast.

Claims have remained above the 400,000 mark for more than two months in a sign of the ongoing strain in the labor market. The report is the first key economic indicator since the credit crisis reached a fevered pitch.

Companies: General Electric (GE, Fortune 500), the Connecticut-based conglomerate, lowered its earnings forecast, blaming turmoil in the financial markets. The company lowered its third-quarter profit estimate to a range of 43 cents to 48 cents per share, from the prior estimate of 50 cents to 54 cents per share.

GE cut its full-year 2008 profit projection to a range of $1.95 to $2.10 per share, from the previous projection of $2.20 to $2.30 per share.

GE's stock fell 3% in early trading.

Shareholders of Delta Air Lines (DAL, Fortune 500) and Northwest Airlines (NWA, Fortune 500) are scheduled to vote on their merger, which would surpass AMR Corp.'s (AMR, Fortune 500) American Airlines as the biggest carrier in the world. The shareholders are expected to support the merger.

After the market close, Research in Motion (RIM), the Canadian maker of BlackBerry communication devices, is expected to release quarterly results. A consensus of analysts from Thomson FirstCall projects that third-quarter earnings will surge 74% to 87 cents per share, according to Briefing.com.

Economy: The Commerce Department announced that the manufacture of durable goods fell 4.5% in August, worse than the economists' expectation of a 1.3% decline. In July, orders had increased 0.8%. The decline was blamed on fewer airplane orders.

Markets: European markets were higher, while Japanese stocks closed lower. The dollar slipped versus the euro, the yen and the British pound. The price of oil fell $2.06 a barrel to $103.67. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.