Mike Taylor
Stocks on Wall Street sold off into Friday's close following a vote by the House of Representatives to approve the Treasury Department's $700 billion bailout package .
The three major indices finished near their session lows. The Dow Jones Industrial Average , previously up as much as much as 313 points, ended down 157.15 points, or 1.5%, at 10,325.70, and the S&P 500 gave back 15.04 points, or 1.4%, at 1099.24. The Nasdaq lost 29.33 points, or 1.5%, to 1947.37.
Friday's performance marked a discouraging end to an ugly week. In five days of trading, the Dow lost 7.3%, the S&P 500 stumbled 9.4%, and the Nasdaq plummeted 14%.
The financial-assistance bill, which creates a Troubled Asset Relief Program, or TARP, to take toxic assets off banks' balance sheets, passed the House 263 to 171.
"The importance of the rescue plan is that, over time, borrowers and lenders as well as financial markets and individual investors should gradually start shifting their outlook from what could go wrong to what could go right," wrote Michael Sheldon, chief market strategist at Spencer Clarke LLC, in an email . Recent economic data shows the U.S. is in a recession, and the housing market remains troubled, he wrote. However, Sheldon sees the passage of the bill as mitigating further downside risks for the economy and financial markets going forward.
"Anyone who thinks that this is going to be a silver bullet is going to be sorely disappointed," said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com. He said the problems in credit markets and the economy have to work themselves out over a long period of time. Because of the global nature of the liquidity crisis, Roberts said, a solution will require a global coordinated effort among central banks. He said the bailout package is "not the seminal event that I think people are talking about. It's the first in a series of steps."
$1.26 (10/04/08)
