US stocks rise on new government lending programmeNovember 26th, 2008 - 7:25 am ICT by IANS
New York, Nov 26 (DPA) US markets got a slight boost from government plans announced Tuesday to pump an additional $800 billion into the struggling economy and unfreeze credit for consumers and small businesses.The increases continued a three-day rally on Wall Street. The blue-chip Dow Jones Industrial Average rose 36.06 points, or 0.4 per cent, to 8,479.47. The broad-based Standard & Poor’s 500 Index gained 5.58, or 0.7 percent, to 857.39, while the technology heavy Nasdaq Composite Index slipped 7.29 points, or 0.5 percent, to 1,464.73.
This second stimulus follows the $700-billion rescue package already approved by Congress. Under one of the two new programmes, the Fed will use $600 billion to buy mortgage-backed securities to reduce the cost of home mortgages.
The other programme, the Term Asset-Backed Securities Loan Facility (TALF), by the Federal Reserve Bank of New York, will create a lending facility worth $200 billion to holders of securities backed by consumer debt - credit card, student and auto loans. This will essentially make it easier for consumers to borrow money.
The plan outweighed figures released Tuesday that showed the economy shrank 0.5 percent in the third quarter.
The US dollar traded at 76.54 euro cents and 95.22 Japanese yen.