The Bush administration and Congress anxiously revived negotiations today on the $700 billion rescue plan; one day after the largest bank collapse in U.S. history. Bargaining has restarted on the government’s bailout plan on which investors have nervously been awaiting more details. Massachusetts Rep. Barney Frank thinks that by Sunday there will be an agreement, ending the Congressional disputes, and sense will be made of the plan. It will be interesting to see the details of the plan and hopefully this will ease everyone’s concerns about our economy and Wall Street’s current problems.
Washington Mutual finally collapsed in what was the largest bank failure in US history. Washington Mutual’s assets total $307 billion. Fueled by WaMu’s bad bets on the mortgage market, the FDIC seized Washington Mutual on Thursday and then sold the bank’s assets to JP Morgan (JPM: 48.24, +4.78 (+11.00%)) for $1.9 billion. With JP Morgan stepping up to the plate and buying WaMu’s assets the FDIC’s insurance fund was prevented from being depleted. JP Morgan plans to write down WaMu’s loan portfolio by $31 billion, but this figure could change if the government goes through with the rescue plan and JP Morgan takes advantage of that. JP Morgan is now the second largest bank in the United States.
The Dow Jones industrial average ended today’s session up 121.07 points, or 1.10% to close at 11,143.13. For the week, the Dow fell 251.29 points or 2.21%. The Nasdaq closed today’s session at 2,183.34, down 3.23 points or 0.15%. The Nasdaq fell 79.2 points or 3.49% for the week. The S&P500 gained 0.32% or 3.83 points today, closing at 1,213.01. For the week the S&P500 fell 46.19 points or 3.68%. The 10 year Treasury note fell 91 basis points to 3.8270%.
Crude oil prices fell today as the details behind the government bailout are still up in the air which sparked investors’ fears that the economy crisis could deepen along with further decreases in domestic energy demand. Crude fell $1.07 or 0.99% to settle at 106.95 per barrel. Further economic panic shot gold up early in the session hitting close to $920, but settled at $882.90 per ounce, up $5.20 or 0.59% from yesterday. The Dollar gained slightly on the Euro today, trading at 0.6852 vs. the Euro, but fell to the Yen, trading at 106.06 vs. the Yen.
The New York Times reported today that, Wachovia (WB: 10.00, -3.70 (-27.01%)), the sixth-largest U.S.
