• Toxic-asset plan well received
• Economic data show some improvement
• Corporate profits slump in fourth quarter
• Japanese exports plunge 49%

Stocks ended the week higher as several reports raised hopes that the economy may be turning a corner, and investors responded enthusiastically to the White House’s plan to clean banks’ balance sheets. The success of the U.S. Department of the Treasury’s seven-year note auction also buoyed sentiment, convincing investors that the Treasury could still raise money at reasonable rates. During the week, the Dow Jones Industrial Average firmly entered so-called bull market territory, gaining more than 20% since its March 9 low.

U.S. economic news

Toxic-asset plan buoys markets
U.S. Treasury Secretary Timothy Geithner detailed the Obama administration’s Public-Private Investment Program, a plan intended to clean toxic assets from banks’ balance sheets. The two-part program aims to boost purchases of bad loans and real-estate related securities and will use up to $100 billion of bank rescue funds from the Treasury as well as financial guarantees from the U.S. Federal Reserve Board and Federal Deposit Insurance Corporation (FDIC). Read the rest of this entry »

• Fed takes major steps to loosen money supply
• U.S. data show growth still slowing, inflation in check
• Nissan to sell $1.3 billion in auto-backed debt
• IMF, OECD cut growth forecasts
• BOJ boosts bond purchases

U.S. stocks and Treasuries gained ground this week as investors cheered the U.S. Federal Reserve Board’s plan to buy $1 trillion of bonds in an effort to lower consumer borrowing costs and bring an end to the recession. The upward equity move was blunted by week’s end as the Fed’s plan rekindled concerns of inflation, and those worries drove the dollar sharply lower and the price of gold higher. Read the rest of this entry »