Foreign Markets Thrive; U.S. Closes With A Thud

By Jason Simpkins

Central banks continued funneling cash into the world’s wounded financial systems Monday, the latest in a series of liquidity infusions that began last week. The European Central Bank offered another $65 billion in emergency funds, while the Bank of Japan injected $5.1 billion. The Federal Reserve again came in on the low end of the scale, injecting $2 billion.

As a result, Europe’s Dow Jones Stoxx 600 index had made its biggest climb in more than a year, 2.3%, after dropping 2.6% last week. The FTSE 100 index closed up 180.7 points, or 3%, marking its biggest gain since 2003.  

U.S. stocks failed to make such noteworthy comebacks. The day started off with an optimistic tenor as market indexes spent most of the day in the black. Fears concerning the ongoing credit crunch were assuaged as central banks continued to offer loans, along with the release of an impressive sales report.

But the Dow Jones Industrial Average and Standard & Poor’s 500 Index both slightly down, at 0.2% and 0.5%, respectively. At their highest point in the day the Dow was up 0.7%, and the S&P 0.8%. Unfortunately they could not sustain a comeback, and collapsed at the closing bell.

Some came out ahead however. Blackstone Group (NYSE: BX) picked up 1.7% after reporting it had tripled its quarterly profit and revenue.  Alcoa (NYSE: AA) climbed 2.45%, and Hewlett Packard (NYSE: HPQ) jumped 2.58%.