Stock Market News
27 Jan, 2008 | General | adminThe stock market closed Thursday on a high note. Major indices surged over 2% in heavy trading, only to finish near the best levels of this session. Financials led the way higher, Thanks to upgrades and news the Fed is expanding on its earlier announced plan to create more liquidity.
The financial sector was off to a good start after Fannie Mae and Freddie Mac were upgraded.
Financials, as well as the market, got boosted even farther when the New York Fed said it was making modifications to Term Securities Lending Facility. The auctions now allow schedule 2 collateral, not the schedule 1 collateral. Schedule 2 collateral will include collateralized mortgage obligations and AAA rated commercial mortgage-backed securities
The Fed is going to lend banks high liquid securities in exchange for the less liquid assets. The banks are now able to use a greater range of collateral than was before announced. The first auction will be on Thursday, March 27 and offer $75 billion for a term of 28 days. There have been up to $200 billion in loans authorized. This positive development relieves holders with difficult to trade securities at least temporarily.
In a other stock news, Thrifts & Mortgages was a standout for three days in a row. They have jumped 53% from Monday’s. Investment Banks & Brokerages was a leader as well with a gain of 11.2%.
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