Wall Street Closes Week on High Note

February 23, 2008

(Long Island, N.Y.) Wall Street closed Friday with impressive gains to upend a volatile week and preserve nervous optimism among investors with numerous newsworthy reports expected to be filed by fortune 500 companies and economic numbers handed out by the Department of Commerce and the Fed.

The Dow Jones staged a remarkable comeback after being down 140 points by mid-afternoon DJI reversed its fortunes by gaining over 225 points in the last hour of trading after CNBC announced that bothered bond insurer Ambac Financial Group Inc. have released a plan to rescue the troubled company. Dow Jones ended the day gaining 96.72 points or a 0.79% increase from previous day trading to end with 12381.02 points for the week. NASDAQ also made a modest rally to rise 3.57 points and end with 2303.35 points while Standard and Poor 500 increased 10.58 points and concluded the week with 1353.11 points.

Jim Herrick, manager of equity trading at Baird & Co.said of Ambac’s rumor “There’s probably some validity to the rumors with the overall financial crunch we’ve experienced, this brings new confidence in the sector.”

News of a bailout plan to save Ambac Financials reached Wall Street late in the day’s trading which proved to be crucial as it injected higher optimism among investors to stay active in the market. The proposed plan was hatched by a consortium of banks such as Citigroup Inc., UBS AG, Wachovia Corp. and Royal Bank of Scotland Group PLC and with the participation of New York State Insurance Department. Their goal is to infuse cash into the company which would allow Ambac financials to retain its “AAA” rating which is essential in receiving new businesses.

“We continue to be engaged in and fully supportive of the bond insurers’ ongoing efforts to resolve their current problems,” said Andrew Mais, director of public affairs at the New York State Insurance Department. “As insurance regulators, it is our responsibility to protect policyholders and ensure a healthy, competitive market for insurance products. We are encouraged by any developments that further these goals in this important market.”

Posted by News LI Editor · Edited by Brianna - Filed Under Money