Stocks Rally After Citi Secures Capital

[Nutmegger]

Source: Associated Press

NEW YORK (AP) - Wall Street rebounded Tuesday after the Abu Dhabi Investment Authority said it will invest $7.5 billion in Citigroup Inc. (C) - a vote of confidence for the nation's largest bank, which has suffered severe losses amid the ongoing crisis in the mortgage market.

The Dow Jones industrials rose more than 200 points in yet another volatile session as investors were hopeful the financial sector can remain healthy despite the ongoing credit crisis. The banking industry has been battered in recent months as defaults on home loans have risen and rendered some mortgage-backed securities essentially worthless.

Major financial institutions, including Citi and its competitors, have had to book some $80 billion of writedowns on those holdings - a trend that has left the markets nervous about the full extent of the damage from soured loans. Citi's ability to secure a capital injection raised hope others might be able to do the same.

"The Citi deal is certainly a relief after a series of negative news on Monday with respect to the financials," said Todd Salamone, director of trading at Schaeffer's Investment Research. Funds like Abu Dhabi's "that have plenty of cash may be viewed as a potential rescuer given the balance sheet troubles the banks are having. A weak dollar makes it that much more possible."

Read more: http://apnews.myway.com/article/20071127/D8T68TNG1.html

[Jackpine Radical]

1. All that volatility is a sure sign of lunatics at the wheel,

trying to steer their way across a chaotic void of unknown dimensions.

[Bozita]

2. How long do you think that's gonna go on?

IMHO, not long at all.

[gratuitous]

3. Ah heck, Abu Dhabi can afford it

And they'll probably shell out several billion dollars every time their moneybags pals make stupid investments and push a load of debt onto cash-strapped consumers.

ABCNews actually had a commentator on tonight who talked about how this little investment actually indebted Abu Dhabi to the failing loan industry.

[Bozita]

4. Big Carlyle Group fatcats are loaded up on shorts.

We ain't talking undies here.

[Sultana]

5. ...

what are they going to buy next? :eyes:

[Bozita]

6. The house next door.

Have you seen the home foreclosure numbers?

[Nutmegger]

7. Welcome to DU!

:toast:

[Sultana]

9. Thank you very much,

it's a pleasure to be here :D

[CountAllVotes]

12. Welcome to the DU SillyFlower

:hi: and WELCOME!!! :D


:dem:

[Bozita]

8. ooops, ... welcome to DU

We're an interesting bunch.

[regnaD kciN]

10. With steep drops and/or sharp climbs virtually every day...

...they ought to consider moving the Stock Exchange from Wall Street to Six Flags Magic Mountain.

[JCMach1]

11. @ 11% interest!

I'll take that deal... Where can I buy CITI bonds?