Democrats must be heartbroken.
Wall Street extended a huge rally Friday as investors stormed back into the market, relieved that the government plans to restore calm to the financial system by rescuing banks from billions of dollars in bad debt. The Dow Jones industrials rose about 300 points, giving them a massive gain of more than 700 over two days, and Treasurys fell as money flowed into equities.Working with congressional leaders is part of the problem. How about less government, more capitalism?
A new government ban on short selling, or placing bets that a stock will fall, likely added to the market's gains.
"A big chunk of this is scaring all the shorts to cover their bets," said Joe Battipaglia, market strategist at Stifel, Nicolaus & Co.
Treasury Secretary Henry Paulson, speaking about the rescue plan, said a bold approach is needed to remove troubled assets from the books of financial firms. He offered few details, but said he would work on the plan through the weekend with congressional leaders.