At a summer camp I attended, we would sit around a campfire and watch as the head counselor threw “magic dust” on the fire, sending flames soaring into the air. Everyone would go “Ooh!”
That, in essence is what Fed Chairman Ben Bernanke and the leaders of five other central banks did to the market today when they agreed to change rates on dollar swaps and add liquidity to the market. Investors went “Ooh!” and shares of companies in Europe and the U.S. soared.
The Dow was recently 406 points higher, rising to 11,962; the S&P 500 was up by 41 points, or 3.4%.
The German DAX jumped 4.3%, France’s CAC rose 3.6%, and the Stoxx Europe 600 was 3.1% higher.
European banks, and U.S. banks with large Europe exposure are doing particularly well, with the Royal Bank of Scotland (RBS) rising 9.3% and Morgan Stanley (MS) trading 5% higher.
All the Dow stocks are comfortably in the black, and many companies outside of the financial industry are having a big day. United Technologies (UTX), for instance was recently up 4.6%.
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