Friday, October 3, 2008

Markets react to bailout plan

Well, Congress passed a bail-out bill, and the markets reacted. Unfortunately the reaction wasn't what lawmakers hoped: the Dow went from being up 300 points to being down 150 points on the day. That's because the markets weren't reacting so much to the bill as to the unemployment data that came out today. That was bad news: job losses were significantly higher than expected, unemployment's now running a hair over 6%. That's unsettling news as we head into the holiday season, the time when retailers depend on consumer spending to make their profits for the year. People who lost their jobs aren't going to be spending any more than neccesary, and people worried about losing their jobs will be less willing to spend on extras. The only good news is that bank stocks may rebound a bit with the reassurance that the government will eventually help cover some of their bad loan assets. That's not going to help the overall market, though.

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