Spring Break
Wall Street watches vote and exhales - for now
Joe Bel Bruno
Issue date: 10/7/08 Section: Campus News
NEW YORK (AP) — It started like any lunch hour at the New York Stock Exchange: Traders walked the floor carrying pizza boxes and sacks of fast food. Scattered clapping and laughter echoed around.
Then all eyes turned to Washington, and the joking died down.
As the House voted on its $700 billion bailout bill for the financial system Friday, traders gathered around flat-screen televisions, and the handheld devices that record stock orders were unusually quiet.
"What do we do if this fails?" Alan Valdes, an NYSE trader with Hilliard Lyons, wondered aloud. "There's a total disgust with politicians these days."
Clearly, Wall Street expected the package to pass: The Dow Jones industrial average was up more than 250 points before the vote even began, and it advanced to more than 300 points higher a few minutes into the count.
But nothing was certain. On Monday, the financial markets had expected an earlier version of the bailout to pass, but with Wall Street and Congress watching each other nervously on television, it fell apart. Mouths fell open at the stock exchange. The Dow lost a record 778 points.
"Wall Street hates indecision," Valdes said. "Not that this vote had been doubted, but it needs to be stamped by the House. We needed this to put a floor the crisis."
Shortly after 1:20 p.m., the crowd around a TV screen fixed to the Bank of America Securities trading post was four deep. The feed showed that more than enough House members had voted yes, but the bill had not been declared passed.
When the gavel came down in Washington to make it official, the moment passed at the stock exchange without any raucous cheers or tossed ticker tape. Even the cowbells and bullhorns that had playfully sounded earlier in the day were quiet.
The bailout had passed, but the Dow was already sinking - up 200 points, then up just 100, then a loss for the day of 157.
The congressional package will allow the federal government to buy bad mortgage debt off the books of banks, presumably relieving some of the incredible pressure of the past two weeks.
But there were other things to worry about. The Labor Department announced Friday that the nation had lost 159,000 jobs in September, and 760,000 for the year. The vital credit markets, slowed almost to paralysis in recent weeks, showed little sign of improving.
"This has been a lot of politics and a lot of theater," said Theodore Weisberg, a trader with Seaport Securities. "In the end, they did the right thing that's best for Main Street and best for Wall Street."
"Now," he added, "the hard work begins."
Then all eyes turned to Washington, and the joking died down.
As the House voted on its $700 billion bailout bill for the financial system Friday, traders gathered around flat-screen televisions, and the handheld devices that record stock orders were unusually quiet.
"What do we do if this fails?" Alan Valdes, an NYSE trader with Hilliard Lyons, wondered aloud. "There's a total disgust with politicians these days."
Clearly, Wall Street expected the package to pass: The Dow Jones industrial average was up more than 250 points before the vote even began, and it advanced to more than 300 points higher a few minutes into the count.
But nothing was certain. On Monday, the financial markets had expected an earlier version of the bailout to pass, but with Wall Street and Congress watching each other nervously on television, it fell apart. Mouths fell open at the stock exchange. The Dow lost a record 778 points.
"Wall Street hates indecision," Valdes said. "Not that this vote had been doubted, but it needs to be stamped by the House. We needed this to put a floor the crisis."
Shortly after 1:20 p.m., the crowd around a TV screen fixed to the Bank of America Securities trading post was four deep. The feed showed that more than enough House members had voted yes, but the bill had not been declared passed.
When the gavel came down in Washington to make it official, the moment passed at the stock exchange without any raucous cheers or tossed ticker tape. Even the cowbells and bullhorns that had playfully sounded earlier in the day were quiet.
The bailout had passed, but the Dow was already sinking - up 200 points, then up just 100, then a loss for the day of 157.
The congressional package will allow the federal government to buy bad mortgage debt off the books of banks, presumably relieving some of the incredible pressure of the past two weeks.
But there were other things to worry about. The Labor Department announced Friday that the nation had lost 159,000 jobs in September, and 760,000 for the year. The vital credit markets, slowed almost to paralysis in recent weeks, showed little sign of improving.
"This has been a lot of politics and a lot of theater," said Theodore Weisberg, a trader with Seaport Securities. "In the end, they did the right thing that's best for Main Street and best for Wall Street."
"Now," he added, "the hard work begins."
Be the first to comment on this story