Stock Market Reacts Well to Market Supportby Tim Manni
U.S. stock indexes rocketed higher Friday, with the major stock indexes wiping out a week of shattering losses, as Wall Street cheered the government’s effort to unfreeze credit markets as well as plans to move against short sellers.
The rally came after government officials sketched out plans to patch up the bleeding financial markets. The government has moved away from fixing case-by-case scenarios on Wall Street, and has moved to more broad, sweeping techniques that will be designed to turn markets around — hopefully for the long term:
“We have acted on a case-by-case basis in recent weeks, addressing problems at Fannie Mae and Freddie Mac, working with market participants to prepare for the failure of Lehman Brothers, and lending to A.I.G. so it can sell some of its assets in an orderly manner,” Mr. (Treasury Secretary Henry) Paulson said.
“Despite these steps, more is needed,” he said. “We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system’s stresses.”
Market observers will continue to monitor stocks in hopes they will maintain gains throughout the weekend.