Why the Dow Jumped 497 Points on Monday

The Dow Jones average took a leap that hasn't been seen in quite some time. Wall Street literally got high, on the news of the Treasury secretary's plan to buy up bad bank assets. Here are excerpts from the CNN Money article about the Dow increase:

NEW YORK (CNNMoney.com) -- Stocks surged Monday, recharging the rally, after Treasury's plan to buy up billions in bad bank assets and a better-than-expected existing home sales report raised hopes that the economy is stabilizing.

The Dow Jones industrial average (INDU) gained 497 points, seeing its biggest one-day point gain since Nov. 21. The gain was equivalent to 6.8%, which was the biggest one-day percentage gain since Oct. 28.

The S&P 500 (SPX) index rose 54 points, its best one-day point gain since Nov. 13. The percentage gain of 7.1% was the best since Oct. 28.

The Nasdaq composite (COMP) added 99 points or 6.8% for the best one-day point and percentage gain since Oct. 28.

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plez sez: consumer confidence is still in the crapper, but it is a good sign when wall street can begin to see light at the end of the tunnel. with the Obama administration's plan to buy close to $1 trillion in bad bank assets and housing starts up for the first time in close to a year, there are hopes that a recovery is in the offing.

unfortunately, wall street will reap the rewards of a recovery long before main street begins to feel it.

in other good news, it appears that a majority (15 of the 20 top executives) of the bonus money will be returned to a.i.g. coffers... the outstanding bonus money went to overseas executives.

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Read the CNN Money article about how the Dow jumped almost 500 points on Monday.

Read the CNN.com article about how congressional Republicans don't like Tim Geithner's plan to buy up toxic assets from banks.

Read the CNN.com article about David Gergen's take on Geithner's plan for the banks.

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Pfizer To Acquire Wyeth in $68 Billion Blockbuster Deal

Negotiations continued into Sunday night, with an anticipated announcement on Monday that Pfizer, the world’s largest drug maker of products like Lipitor and Viagra, agreed in principle to acquire a rival, Wyeth, for $68 billion. The deal would create the largest pharmaceutical company in the world and it would be the first big acquisition that is not a desperate merger of two banks orchestrated by the government in over six months. It would be the biggest merger in three years, since AT&T acquired BellSouth.

Five banks have agreed to lend Pfizer more than $25 billion to pay for the deal, four of which received bailout money: Goldman Sachs, JPMorgan Chase, Citigroup and Bank of America. In addition, Barclays, which acquired Lehman Brothers out of bankruptcy in the fall, is also providing financing. Pfizer, which has $26 billion in cash and equivalents, would finance the remainder through a combination of cash and stock.

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plez sez: have you tried to get a loan in the last four months? will your bank lend you $680,000, $68,000, or even $680?!?

this acquisition - which sickens plezWorld - that the bailout was a remnant of reaganomics... that failed trickle down economics b.s.! pfizer will fire sales reps and feather their bottom-line until they shore up their drug pipeline and their fat cat CEO will continue to smell like a rose... and the wyeth CEO will get the most golden of parachutes!

there is a joke in this deal about viagra and pfizer having a hard-on for wyeth for more than four hours, but this is no laughing matter! i'm going to have to go have a long hard look at Obama's stimulus package to see if it is something that plezWorld can continue to support... where you at, RawDawg?

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Read the New York Times article about Pfizer acquisition of Wyeth.

Read the CNN Money article about Pfizer's $68 billion deal for Wyeth.

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UPDATE: Wachovia Sold To Wells Fargo

The Atlanta Journal-Constitution reports that Atlanta’s second-largest bank, Wachovia Corp., has changed dancing partners and will now be sold to Wells Fargo for $15.1 billion. It was reported earlier in the week that the sale was to be with Citigroup.

Citigroup was only going to take over the banking operations, the deal with Wells Fargo is a complete merger of the two banks.

Wells Fargo, whose biggest stakeholder is billionaire Warren Buffett's Berkshire Hathaway Inc., said its offer keeps Wachovia intact and needs no U.S. assistance. Citigroup's bid of $2.16 billion on Sept. 29 for Wachovia's banking businesses - valued at about $1 share - relied on help from the Federal Deposit Insurance Corp. and left out the securities brokerage and Evergreen mutual-fund units.

Wachovia has been among the banks hardest hit by the ongoing crisis in the mortgage market. Its current problems stem largely from its acquisition of mortgage lender Golden West Financial Corp. in 2006 for roughly $25 billion at the height of the nation’s housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West’s specialty, which let borrowers skip some payments.

Read the AJC.com article about Wachovia's merger here.

Read the Bloomberg.com article about Wachovia's merger here.

Read the CNNMoney.com article about Wachovia's merger here.


plez sez: it looks like wells fargo offered a sweeter deal.

the deal with citigroup was announced earlier this week.