Late Edition September 30 2008 at 02:08 PM Chi-Chu Tschang and Harry Maurer
Rebound on Wall Street
At least as of early afternoon, stock markets seemed to be taking Monday's shocker in stride. After the House of Representatives rejected the proposed bailout bill, Wall Street took a dive, with the Dow dropping 777 points, nearly 7%, and the S&P 500 down 9%. Everyone worried about the reaction in Asia, but bourses there ended today mixed, as Japan slid but Hong Kong rose. Most major European exchanges registered gains.
That set the stage for a rally on Wall Street, as the market rose fast from the opening bell. At 2 p.m. the Dow was up more than 300 points. Traders appeared to be figuring that the market oversold yesterday, and counting on the notion that Congress later this week would pass a version of the bailout bill reasonably similar to the one that went down to defeat. .
Source: BusinessWeek
Home Prices Plunge Faster
Stock traders certainly couldn't take any encouragement from the latest housing market news. The S&P/Case-Shiller home price index for 20 cities plunged 16.3% in July, its biggest yearly drop ever. In June it dropped 15.9%, and it has declined every month since January, 2007. Month-over-month prices fell in 13 cities, compared with 11 in July.
Source: Bloomberg
No You Don't, Says Judge to Apollo
A Delaware court has ordered private equity firm Apollo Management and its Hexion Specialty Chemicals unit to honor the terms of their $6.5 billion buyout of chemicals maker Huntsman. The deal was announced in July, 2007, at the height of the private equity boom, but Apollo and Hexion sued Huntsman last June, saying that the combined company would be insolvent if the deal went through. Huntsman shares soared on news that the judge had rejected Apollo's claims.
Source: Reuters
Dexia Becomes Latest European Bank Rescue
The French and Belgian governments, as well as other investors, moved quickly on Sept. 30 to pump $9.2 billion into shaky Franco-Belgian bank Dexia, which is the world's largest lender to local governments. The move came a day after four other coordinated bank rescues in Europe, signaling a new proactive stance among policymakers there to head off financial collapses.
Source: Financial Times, BusinessWeek
EU Sees Regulatory Overhaul Amid Bailouts
Charlie McCreevy, the European Union's top markets official, is preparing an overhaul of financial regulations that could include higher capital requirements to back up securitized debt and the establishment of regional regulators to supervise cross-border banking.
Source: Wall Street Journal
Probe Widens into Fannie Mae and Freddie Mac
The U.S. government probe into Fannie Mae and Freddie Mac widened as the mortgage giants disclosed Sept. 29 they are under investigation by the Department of Justice and the Securities and Exchange Commission.
Source: Washington Post
Food Giants Respond to Chinese Milk Scandal
The crisis over tainted milk from Chinese suppliers is prompting multinational food giants such as Heinz, Nestle, and Cadbury to probe their suppliers or even to pull products off shelves.
Source: Wall Street Journal
Boeing to Reassess Japanese 787 Deliveries
Boeing said on Sept. 30 that it would reassess its 787 Dreamliner delivery schedule for the Japanese market once an ongoing strike ends, raising concern that a prolonged production halt could further push back already-delayed deliveries.
Source: Reuters
A Big Boost for Mobile Laptops
A coalition of mobile operators and PC companies announced on Sept. 30 a new program to pre-install support for mobile broadband services directly into laptop computers. The initiative could drive use of an emerging rival to Wi-Fi.
Source: BusinessWeek
Pfizer to Quit Heart, Obesity Drug Development
Pharmaceutical giant Pfizer, known for its blockbuster Lipitor cholesterol-lowering drug, says it will abandon efforts to develop new drugs to combat obesity and heart disease and focus its research instead on cancer, Alzheimer's, diabetes, and three other therapeutic categories.
Source: Reuters
Conversation of the Day: Main Street vs. Wall Street
Reader Chuck Gaffney writes: "Paulson is not qualified to count your cash as a teller at any bank, let alone come up with anything that deals with money--or in this case, have the U.S. taxpayers write him a blank check."
Read the Story and Tell Us What You Think
Hot Topic on the Business Exchange: 2008 Election
The 2008 U.S. Presidential Election is already historic, and current financial events are heating it up even more. Rob Hunter and others are sharing their insights.
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