One day after carnage, U.S. stocks higher
— -- One day after the historic carnage on Wall Street, U.S. stocks rebounded somewhat Tuesday, but stocks were volatile in Europe and fell in Asia.
The Dow Jones industrial average was up more than 200 points in early trading as investors sifted through the rubble of Monday's 778-point plunge, the biggest single-day point drop in history.
A snapback of some degree on Wall Street wasn't unexpected as carnage often attracts bargain hunters. Still, questions remain about how investors will proceed without a bailout plan in place to absorb soured mortgage and other debt from banks' balance sheets and restore confidence in lending.
Moves in the credit markets were more ominous. The benchmark London Interbank Offered Rate, or LIBOR, that banks charge to lend to one another rose sharply Tuesday, making it more expensive and difficult for consumers and businesses to borrow money. In addition, credit card debt and more than half of adjustable-rate mortgages are tied to LIBOR, so an increase isn't welcome for many consumers.
While U.S. political leaders have vowed to revisit the Monday's defeat of a $700 billion financial rescue package, the House isn't slated to meet again until Thursday.
President Bush again called for action early Tuesday. "I'm disappointed by the outcome (of the rescue plan) but I want to assure our citizens, and citizens around the world, that this is not the end of the legislative process," he said Tuesday in a brief White House appearance.
"Our economy is depending on decisive action from the government. The sooner we address the problem, the sooner we can get back on the path of growth and job creation," Bush said.
Light, sweet crude rose also partially rebounded but remained below $100 a barrel. Oil fell more than $10 a barrel Monday as investors worried that a weaker economy would curtail demand.
While investors focused on what might come from Washington this week, Wall Street was cheered by several economic readings.
A private research group reported that consumer confidence rose unexpectedly in September. The Conference Board said Tuesday its consumer confidence index rose to 59.8 from a revised 58.5 in August; Wall Street had expected a reading of 55.5, according to Thomson/IFR. The reading, which doesn't reflect attitudes following Monday's steep stock market sell-off, remains near a 16-year low.
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