The Dow had fallen nearly 150 points by 2 o’clock, but, by some market miracle, it managed to rally over 200 points in the final hour, to end the day up over 1%. The S&P 500 and Nasdaq behaved similarly, but fared even better… both rose 1.3%.
Yesterday, marked the first day in 2008 when all three indexes closed higher.
Why the sudden comeback, you ask. We searched high and low for a good reason for the sudden reversal -- ironically, led by the dogs of Wall Street such as JP Morgan, Citigroup, E*Trade and Merrill Lynch. Alas, we found only one shred of evidence for yesterday’s sudden reversal of a nasty six-day losing streak, penned by Ambrose Evans-Pritchard of the Telegraph:
“On Friday [Jan. 4], Mr. Bush convened the so-called Plunge Protection Team for its first known meeting in the Oval Office. The black arts unit -- officially the President's Working Group on Financial Markets -- was created after the 1987 crash.
“It appears to have powers to support the markets in a crisis with a host of instruments, mostly through buying futures contracts on the stock indexes (Dow, S&P 500, Nasdaq and Russell) and key credit levers. And it has the means to fry ‘short’ traders in the hottest of oils.”
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