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Oct 13, 2008 10:33 pm US/Central
Dow Makes Historic Rebound, Chicagoans React
CHICAGO (CBS) ―
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Traders work on the floor of the New York Stock Exchange moments after the opening bell on Oct. 13, 2008, in New York City.
Spencer Platt/Getty Images
After a long losing streak, the Dow soared more than 900 points Monday - the biggest single point gain ever. CBS 2 Chief Correspondent Jay Levine reports that the Dow plunged over 2,000 points in just over a week, before rocketing back up over 1,000 points since Friday afternoon. On Monday, it gained nearly twice as much as it has ever gained in a single day.
At the Chicago Board of Trade, quitting time found traders smiling. They were relieved, but still a bit overwhelmed.
To some, Monday's 900-point rally was inevitable.
"The market was beat up so much, it gets to the point where it gets so cheap, people have to get back in," said Sterling Smith, FuturesOne.com.
Others, who study market history, say it's always been darkest before the dawn of a new rally.
"Go back to any of the significant bear markets, what you'll see is the rate of decline accelerate dramatically right before the bottom," said Kevin Matras, Zacks Investment Research.
That is what happened last week. But this morning, with a new recovery plan authored by European leaders, and a University of Illinois graduate put in charge of the American effort, stocks were off and running.
"If it lasts, if it continues to increase, it means that I can regain some of the losses that I had," said Janaya Davis-Lewis.
Since Friday afternoon the market is up 19 percent - more than half of what it has lost in the last month.
"I don't have much of a reaction because it won't be long that it goes right back down," said Gustavo Castillo.
"The rebound that we saw today, I think it was completely warranted; what we see going from here, that's another story," Matras said.
"You want it to be a nice, strong open; hold on to those gains, a one-day wonder doesn't make traders very happy," said Larry Levin, secretsoftraders.com.
That may depend on a new twist - the federal government not only buying banks' bad debts, but also guaranteeing bank-to-bank loans that have all but dried up. Freeing up money may also free up the market to continue the rebound it started Monday.
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