A little good news lightens the market's gloom
Posted by: Aaron Pressman on August 22, 2007
After weeks of gloom and doom pessimism, investors finally got some good news on Wednesday. A couple of mergers got off the ground, including the perpetually recycled rumor of E*Trade (Symbol:ETFC) and TD Ameritrade (AMTD) joining forces, if only big foot CEOs Joe Moglia and Mitch Caplan could decide who’d be in charge of the potential online brokerage juggernaut. And one of the biggest buyout loans waiting to be completed, the $40 billion of financing needed for Rio Tinto’s (RTP) acquisition of Alcan (AL), got the green light from lenders. Even gloomeister in chief Alan Greenspan pitched in, saying he wasn’t going to throw his successor under the bus just yet. After rumors circulated that Greenspan was dissing Ben Bernanke by saying he’d have already made a deep cut in the fed funds rate, Mister Andrea Mitchell responded with a curt email message to Bloomberg News: “I did not say that.” There was even good news in the pet economy as Wal-Mart (WMT) pulled poison dog treats off its shelves.
Along with Rover, hoards of non-canine investors sighed with relief at the day’s developments, reasoning that the apocalypse may yet be averted. That’s led to a reversal in some recent trends. Stocks climbed, with the S&P 500 up 0.6% so far, and bond yields rose, with the Treasury’s two-year note increasing to 4.13%. T-bill yields climbed back to 3.69% after taking the biggest one-day plunge since the crash of ‘87 on Monday. So we can definitively say that the world’s not expected to end tomorrow, at least right now.
