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Soaring market calms anxiety

Record-breaking increase for Dow signals good start

POSTED: October 17, 2008 5:01 a.m.
TOM REED/The Times

Johnny Johnson checks the stock numbers Monday afternoon at the Gainesville office of Raymond James.

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At the Gainesville offices of Wachovia Securities, it was a more cheerful environment Monday as Wall Street stormed back from last week’s devastating losses.

The Dow Jones industrials soared a nearly inconceivable 936 points after major governments’ plans to support the global banking system reassured distraught investors.

The Dow by far outstripped its previous record for a one-day point gain, 499, reached during the waning days of the dot-com boom in 2000.

Warren Stribling, co-manager in charge of Wachovia Securities’ Gainesville office, said phones weren’t as busy with panicking customers and the 11 brokers were breathing a bit easier.

"At some point, you have to stop the hemorrhaging," Stribling said.

The market was likely to have a rebound after eight days of precipitous losses that took the Dow down nearly 2,400 points, but no one expected this kind of advance. Still, back-and-forth trading is likely to continue as Wall Street still contends with a crippled financial system and a struggling economy. So, some of Monday’s big gains may disappear when trading resumes today.

For Johnny Johnson of the Gainesville office of Raymond James, Monday was the first day in October that the Dow had been in positive territory.

"It’s good to see a little green on the screen," Johnson said.

The Dow was up 936.42 points at the 9,387.61 level. All the major indexes were up more than 11 percent.

But Johnson was philosophical about what may happen in the days ahead.

"It’s sort of like when your daddy tells you that he’s going to spank you when you get home," Johnson said. "You just want to go ahead and get it over with."

Stribling said the market turbulence, which has been going on for six weeks, may be reaching a bottom, but he said that’s something you can’t tell right away.

"You know those things in retrospective," Stribling said.

Both Johnson and Stribling said with the constant availability of market information both on cable TV and the Internet, their clients keenly are aware of what is going on.
"They call and ask if their portfolio is like it should be," Stribling said.

The market did appear to take heart when the Bush administration said it is moving quickly to implement its $700 billion rescue program, including consulting with law firms about the mechanics of buying ownership shares in a broad number of banks to help revive the stagnant credit markets and, in turn, get the economy moving again.

Neel Kashkari, the assistant Treasury secretary who is interim head of the program, said in a speech Monday that officials also were developing guidelines to govern the purchase of soured mortgage-related assets. However, he gave few details about how the program actually will buy bad assets and bank stock.

A relatively tame finish to Friday’s session and a weekend off gave analysts and investors some time to reassess last week’s tumultuous trading. And stock prices that were decimated by frenetic selling now are looking attractive.

For Stribling, Monday was a good day, and he is hopeful that weeks like the last one are behind him.

"It wears on your insides," he said.

The Associated Press contributed to this report.



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