- Title: USA: Market drops on rescue plan detail worry
- Date: 23rd September 2008
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (SEPTEMBER 22, 2008) (AGENCY POOL) VARIOUS OF THE NYSE EXTERIORS WITH GIANT U.S FLAG ON BUILDING (SOUNDBITE) (English) JIM SASSO, WORKS IN FINANCIAL DISTRICT, SAYING: "I think it was a necessity that had to be done. Companies made a lot of mistakes, they were allowed to make the mistakes, whether it be by government, consumers or whoever. Consumers took advantage just as much as companies took the advantage to make the money. I hope that when the government comes into it they put these restrictions in place and then hold them accountable." WALL STREET STREET SIGN, FLAGS IN BACKGROUND (SOUNDBITE) (English) JEFF FERRIS, WORKS AT JP MORGAN, SAYING: "It's not surprising. I think it's kind of a shift in what we're seeing here in this industry, in the financial industry, that it's getting tougher and tougher for these firms as pure investment banks and that type of structure, to go it alone." PEOPLE WALKING ON WALL STREET VARIOUS OF THE GOLDMAN SACHS BUILDING WITH U.S FLAGS EMPLOYEES WALKING IN ENTRANCE TO GOLDMAN SACHS
- Embargoed: 8th October 2008 13:00
- Keywords:
- Location: Usa
- Country: USA
- Topics: Economic News
- Reuters ID: LVA9V82YL2THKADYLYBWZ79U0D9W
- Story Text: Wall Street jitters continue, bringing falls in early trading on Monday as investors nervously await further news about the government's plan to buy banks' mortgage debt.
U.S. stocks extended losses in the first ten minutes of trading, with the S&P 500 and Nasdaq falling more than 1 percent, on uncertainty about the workings of the proposed $700 billion financial sector bailout.
Banks led the way lower on the S&P 500 and the Dow. IPod-maker Apple Inc was the top drag on the Nasdaq after its price target was cut by Morgan Stanley.
Investors worried Congress would seek to change the Bush administration's plan, which Treasury Secretary Henry Paulson announced on Friday. The proposal, coupled with earlier bailouts, bankruptcies and arranged mergers, would do nothing short of reshape the U.S. financial landscape.
Jim Sasso, who works in the financial district, said that the government bailout was necessary, but added that there was more accountability necessary in the future.
"Companies made a lot of mistakes, they were allowed to make the mistakes, whether it be by government, consumers or whoever," said Sasso.
"Consumers took advantage just as much as companies took the advantage to make the money."
S&P 500 futures rose 2.90 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 18 points and Nasdaq 100 futures gained 8 points.
Rising oil prices could be another headwind for the market, with U.S.
front-month crude up 2.6 percent at $107.30 a barrel as the dollar weakens.
In another development, Goldman Sachs and Morgan Stanley, whose shares were pummeled last week, are abandoning their investment bank model of two decades to become bank holding companies. They will have an additional safety net from the Federal Reserve but may not be as profitable as in the past.
Officials have said the plan, in which the government will buy soured mortgage-related debt from financial institutions, will cost taxpayers hundreds of billions of dollars. - Copyright Holder: POOL (CAN SELL)
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